2013 (3) TMI 671

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..... s made by the partners of the firm. But the Assessing Officer not taken any pains to substantiate the addition based on the loose sheets. Being so, no addition can be made solely on the basis of a notebook or loose sheets which are dumb documents and the Assessing Officer is duty bound to bring on record corroborative material to show that the assessee has concealed the income. Being so, in our opinion, deletion of addition by the CIT(A) is justified
SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER and SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER Appellant by: Sri M.H. Naik Respondent by: Sri V. Raghavendra Rao ORDER PER CHANDRA POOJARI, AM: This appeal by the Revenue is directed against the order of the CIT(A)-III, Hyderabad dated 26.3.20 .....

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..... ned in the document were incurred much before the commencement of the firm and had been settled amongst the partners before commencement of the firm. The amount of interest written in the impounded document represented the projected interest liability on the projected investments to be made in the aforesaid two projects. The figures/amounts mentioned in the impounded document were only the estimates/projections and were not supported by the regular books of accounts or other evidences. Hence, the same cannot be considered as the unexplained/ unaccounted investment made by the firm. This explanation of the assessee was rejected by the AO for the reasons summarized on page 13 to 15 of the assessment order. 3. On appeal, the CIT(A) deleted th .....

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..... t is very important to have direct evidence or conclusive evidence to determine the income. The Assessing Officer could make the addition on the basis of direct evidence on hand. If there is direct evidence on hand with the Assessing Officer for small period covering the assessment year, he could use the same for estimating the income of the whole year and as such the addition cannot be made only on presumption basis. In this case the material considered by the Assessing Officer for assessment is only loose sheets containing investments made by the partners of the firm. But the Assessing Officer not taken any pains to substantiate the addition based on the loose sheets. Being so, no addition can be made solely on the basis of a notebook or .....

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