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| The Tax Publishers2019 TaxPub(DT) 0332 (Mum-Trib) INCOME TAX ACT, 1961
Section 68
Material found from an unconnected person could not be added in the assessee's hands when even the said person had not admitted that it related to assessee, therefore no addition under section 68 can be made on account of entries found from merely on the basis of surmises and conjectures.
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Income from undisclosed sources - Additions on account of gold and cash found during the course of search proceedings - Validity -
Assessee was engaged in business of trading in jewellery. A Search and seizure operation under section 132 was conducted in the case of M/s. G, who was involved in the business of providing lockers on rent. Since one locker was allotted in joint name including that of assessee, therefore on the basis of admission made by assessee with regard to ownership of the locker and the contents of the locker belong to him. AO made additions on account of unexplained cash and gold bars and also rejected books of accounts, holding that assessee was engaged in unaccounted sales and purchases of bullions and making addition by estimating gross profit ratio @ 1% on alleged business of unaccounted trading of bullion.Held: The material found from an unconnected person could not be added in the assessee 's hands when even the said person had not admitted that it related to assessee. Thus, no addition could be made on account of entries found from merely on the basis of surmises and conjectures. Addition made by AO and confirmed by CIT(A) was not sustainable and liable to be deleted.
ReliedPullangode Rubber And Produce Company Ltd. v. State of Kerala And Another (1973) 91 ITR 18 (SC) : 1973 TaxPub(DT) 89 (SC), Cosmos Infra Engineering (India) Ltd. v. Dy. CIT (2017) 58 ITR (Trib) 384 (Chd) : 2017 TaxPub(DT) 3999 (Chd-Trib), Shree Chand Soni. v. Dy. CIT. (2007) 101 TTJ 1028 (Jod-Trib) : 2007 TaxPub(DT) 146 (Jod-Trib)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, MUMBAI BENCH
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