Addition cannot be Made Merely Because Assesees’ Name Appeared in Documents found during Search: ITAT [Read Order]

Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that addition could not be made merely because the assessee's name appeared in documents found during the course of search.

The assessee, Neelam Nitin Sankhe, is a salaried employee working as Staff Nurse in Municipal Corporation of Mumbai. During the course of search action under Section 132 of the Income Tax Act, 1961 carried out on 31/07/2014 in the case of Ameya Group, a document was seized, wherein the name of Neelam Sankhe was mentioned. As per the seized document, Ameya Group had paid cash to Neelam Sankhe on different dates,

The assessee failed to respond and did not participate in assessment proceedings. The Assessing Officer completed the assessment and made additions in Assessment Year 2013-14 and 2014-15.

Abhishek Kumar Singh, on behalf of the revenue vehemently defended the impugned order and prayed for dismissing the appeals of assessee.

The Bench observed that only reason for making addition was that the name of assessee appeared in some document found during the search action in the case of Ameya Group(supra) and there was nothing on record to further corroborate as to on what account cash was paid by Ameya Group to the assessee

The Division Bench of Vikas Awasthy, (Judicial Member) and Amarjit Singh, (Accountant Member) allowed the appeal and set aside the impugned addition holding that Addition could not be made in the hands of assessee only for the reason that the name of the assessee was appeared in the documents found during the search in case of third party. The identity of the person had to be established and the reason for making such payment had to be linked.

To Read the full text of the Order CLICK HERE

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