Raman Goyal Vs DCIT (ITAT Chandigarh)
Unsigned Agreement = No Incriminating Material; ALV Addition in 153A Unsustainable
The ITAT, Chandigarh Bench held that an unsigned agreement found during search is merely a “waste paper” and cannot be treated as incriminating material. In absence of valid incriminating material, no addition can be made u/s 153A for concluded assessments.
In this case, the assessee had correctly disclosed actual rent received from a Delhi property based on her 50% ownership. The AO enhanced annual letting value (ALV) by relying solely on an unsigned draft agreement allegedly indicating higher rent. The Tribunal categorically held that such an unsigned document does not qualify as an “agreement” under the Contract Act, was never acted upon, and cannot determine fair rent.
The Bench reiterated that where assessments have attained finality prior to search, additions are permissible only on the basis of incriminating material, in line with the law laid down by the Supreme Court in Abhisar Buildwell. Since no corroborative evidence existed to show higher market rent, the ALV enhancement was unjustified.
Accordingly, ALV additions were deleted for all years, and assessee’s appeals were allowed.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
The present three appeals are directed at the instance of the assessee against the separate orders of even dated i.e. 08.11.2024 passed for assessment year 2015-16, 2018-19 and 2019-20.
