The ITAT held that additions based on loose papers/documents ...

Tax authorities can't rely solely on loose papers found during searches to make additions without solid proof.

December 28, 2024

Case Laws     Income Tax     AT

The ITAT held that additions based on loose papers/documents found during search at the assessee's premises without further corroboration would be contrary to judicial precedents. The circumstantial evidence did not contradict the assessee's assertions. Despite the search, no irregularities like excess cash or unaccounted assets were discovered. The adverse view by the AO and CIT(A) based solely on the loose papers appeared abstract without substantiation. The onus to prove the allegations lies with the Revenue, and the assessee cannot be burdened to prove a negative. Absence of supporting material, the assessee's denial, and their social status raised doubts favoring the assessee.

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