Jayant Warping Works Vs DCIT (ITAT Mumbai)
Section 68 Addition Deleted in Search Case – No Incriminating Material “Dumb Documents” Rejected
Mumbai ITAT delivered a detailed ruling deleting additions made u/s 68 and 69C in search assessments, holding that in absence of incriminating material, no addition can be sustained in unabated assessments.
On unsecured loans (₹50 lakh u/s 68):
- Assessee furnished complete documentary evidence:
- PAN, ITR, financials, confirmations, bank statements
- AO relied on:
- Investigation Wing reports (Kolkata)
- Third-party statements (later retracted)
- Tribunal held:
- Issue already covered in group cases involving same lender (Vinam Finance Pvt. Ltd.)
- Identity, genuineness, and creditworthiness established
- No independent enquiry to disprove evidence
Addition u/s 68 deleted on merits
On legal ground (search assessment):
- No incriminating material found during search
- Relying on SC in Abhisar Buildwell:
- In unabated assessments, additions cannot be made without incriminating material
Addition also deleted on legal ground
On interest disallowance:
- Held consequential → allowed
On ₹4.00 lakh addition u/s 69C (seized papers):
- Based on handwritten rough notings (pages 9 & 10)
- Tribunal observed:
- These were mere estimates/jottings, not actual transactions
- No cash trail, no corroboration, no third-party verification
- Department failed to link entries specifically to assessee
Treated as “dumb documents” → addition deleted
Key principles laid down:
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