S. 45 : Capital gains – Alleged NOC receipts – Loose sheets – Dumb documents-Statement in the Course of search – Statement retracted – No corroboration – Additions deleted. [S.132, 132(4), 132(4A)]
During search, diaries maintained by an employee were seized containing notings with initials “KB”, which the Assessing Officer treated as unaccounted cash receipts for release of rights in Eksali lands, taxing them as capital gains. The Tribunal observed that the diaries were personal records of an employee, not maintained under the assessee’s direction and unsupported by corroborative evidence. The statements of the employees were inconsistent and later retracted, and no third-party verification was carried out. Relying on Common Cause (A Registered Society) v. UOI [(2017) 394 ITR 220 (SC), V.C. Shukla v. CBI (1998) 3 SCC 410 and CIT v. Reliance Industries Ltd. [(2020) 261 Taxman 358 (Bom)(HC), the Tribunal held that loose papers or “dumb documents” cannot, without corroboration, form the basis of addition. The entire addition of Rs. 4.96 crore was deleted. (ITA Nos. 3012–3013 & 3222–3228/Mum/2025 dt. 17-10-2025) (AY. 2014-15 to 2022-23)
Estate Investment Co. Pvt. Ltd. v. DCIT (Mum)(Trib) www.itatonline.org
[Coram : Hon’ble Shri Amit Shukla, JM & Hon’ble Shri Arun Khodpia, AM]