Name of Assessee not Mentioned in Seized Documents: ITAT deletes Income Tax Additions [Read Order]

The Income Tax Appellate Tribunal ( ITAT ) Mumbai Bench has set aside a series of additions made against assessee Mahesh Narayan Joglekar for Assessment Years (AYs) 2011-12 to 2018-19, ruling that proceedings initiated on the basis of seized documents which did not mention the assessee’s name were unsustainable.

The two-member bench comprising Judicial Member Amit Shukla and Accountant Member Girish Agrawal passed the order in multiple appeals filed by Joglekar challenging reassessment and search assessments framed under sections 147 and 153A of the Income Tax Act, 1961.

The controversy originated from a search conducted on 6 October 2017 at the premises of Evergreen Enterprises and its associates. The Revenue alleged that Joglekar had advanced unaccounted cash loans of ₹30 lakh through Evergreen Enterprises and earned interest thereon. Based on this information, the Assessing Officer (AO) reopened AY 2011-12 and further made additions for AYs 2012-13 to 2018-19 under section 153A.

The Tribunal noted glaring infirmities in the reasons recorded for reopening AY 2011-12. The alleged cash loan of ₹30 lakh was dated 20 January 2010, clearly falling in AY 2010-11. Moreover, Evergreen Enterprises itself was incorporated only in April 2012, making the Revenue’s premise factually untenable.

According to the bench, AO and the Principal Commissioner of Income Tax (PCIT) had granted approval mechanically without verifying these basic facts. Consequently, the reassessment was declared void ab initio.

For subsequent years, the AO relied on ledgers and a telephone diary seized from Evergreen Enterprises, which contained entries in the name “S.M. Joglekar” and codes such as “J/71/SJ.”

In addition, the ITAT noted that the assessee’s name, Mahesh N. Joglekar, never appeared in the seized material. No effort was made to establish that the entries pertained to him. On this basis, the Tribunal held that the additions could not stand.

The bench also observed that, when an assessee’s name does not figure in seized documents, such papers cannot be treated as incriminating material to justify additions in their hands. Reliance on initials, codes, or unrelated names like “Ramesh Gala” without corroboration was insufficient.

Accordingly, all additions made towards alleged cash loans and estimated interest income across AYs 2012-13 to 2018-19 were deleted. The Tribunal allowed the appeals in entirety, rendering other grounds raised as academic.

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