Jigna Ashutosh Bhatt Vs ITO (ITAT Mumbai)
Section 68 Addition Based Solely on Third-Party Statement Deleted—No Credit Entry, No Evidence
The Mumbai ITAT (J–SMC Bench) allowed the appeal of Jigna Ashutosh Bhatt for AY 2011-12 and deleted the addition of ₹39 lakh made under section 68, which arose from reassessment proceedings.
The Tribunal held that:
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Section 68 can be invoked only when a sum is found credited in the assessee’s books. In the present case, no credit entry whatsoever existed, making the very foundation of section 68 inapplicable.
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The addition was based solely on a third-party statement recorded during search of M/s Evergreen Enterprises. The statement did not name or identify the assessee.
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The alleged Annexure-2 referred to in the statement (purportedly containing names) was never furnished to the assessee, nor discussed in the assessment order.
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There was no independent corroborative material to establish receipt of any cash loan by the assessee.
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The reassessment reasons themselves reflected non-application of mind, even misstating the assessee’s name.
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The CIT(A)’s observation that the assessee failed to file submissions was factually incorrect and contrary to record.
In the absence of a book entry and any cogent evidence linking the assessee to the alleged cash transaction, the ITAT held the addition to be legally unsustainable and directed its deletion. The appeal was partly allowed on merits
FULL TEXT OF THE ORDER OF ITAT MUMBAI
