Addition based on unsubstantiated documents like loose sheets, ...

Additions based on unsubstantiated docs like loose sheets, jottings, Excel sheets & unaccounted cash receipts from students rejected. Mere notes require corroboration.

Case Laws     Income Tax

July 27, 2024

Addition based on unsubstantiated documents like loose sheets, jottings, and Excel sheets - unaccounted cash receipts from students - cannot be sustained. Statements recorded solely cannot constitute incriminating material for additions. Unsubstantiated loose papers without corroboration by inquiry or leading to undisclosed assets cannot be basis for additions. Suspicion alone cannot replace evidence. AO failed to establish live link between seized material and unaccounted fees resulting in undisclosed assets. Uncorroborated seized material alone cannot be considered conclusive evidence. Presumption u/s 132(4) is rebuttable. AO should act judicially on adequate material, not arbitrarily. Additions cannot be made without examining concerned students/parents. Mere notes in diaries/loose sheets require corroboration. Non-speaking documents without corroborative evidence showing undisclosed income cannot be relied upon for additions.

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