Note Books and Diaries seized from Wife of the Assessee can’t be treated as Books of Accounts: ITAT Deletes Addition [Read Order]

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Rajkot bench of Income Tax Appellate Tribunal (ITAT) recently held that the notebooks and diaries found from assessee’s wife cannot be treated as Books of Accounts for the purpose of making addition under the Income Tax Act, 1961.

The assessee in the instant case is an individual engaged in the business of domestic and international air-tickets booking, incentive tours, hotel reservations and visa formalities etc.

During the course of assessment proceedings, the Assessing Officer (AO) has found that a sum of Rs. 13,56,500 was advanced by the assessee to various persons and the same were not recorded and accordingly, he made an addition to the said amount of unexplained investment.

On appeal, the assessee gets relief from the CIT (A). They were of the view that no addition can be made on the basis of rough noting without any corroborative evidence.

Aggrieved by the revenue was on appeal before the tribunal.

After considering the rival submissions of both the parties the tribunal bench comprising of Judicial Member Rajpal Yadav and Accountant Member Pramod Kumar observed that the AO made addition only on the basis of mere notebooks and diaries and not books of accounts of the assessee. Such notebooks and diaries found from assessee’s wife cannot be considered as valid books of accounts of the assessee.

The division bench further observed that there are no documents or material evidence with the Revenue to link flow of unrecorded transactions with the assessee. While dismissing the appeal filed by the revenue the bench further said that there is no contrary material brought by the revenue to convince that the assessee has tried to evade any tax liability.

 

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