No Additions u/s 69C if Document Seized From Third Party Premises Didn’t Contain Name of Assessee Anywhere | ITAT

Case Details: DCIT vs. Triton Hotels and Resorts (P.) Ltd. - [2025] 170 taxmann.com 384 (Mumbai - Trib.)[19-12-2024]

Judiciary and Counsel Details

• Sandeep Singh Karhail, Judicial Member & Narendra Kumar Billaiya, Accountant Member
• Rakesh Joshi, AR for the Appellant.
• Biswanath Das, CIT D/R for the Respondent.

Facts of the Case

A search and seizure action under section 132 was carried out in the cases related to a Group, which included the assessee. During the search, ledgers pertaining to the unaccounted payments made to the interior designer for hotel purchases were found and seized from the residential premises of a third person.

The Assessing Officer (AO) was of the opinion that the aforementioned payments were unaccounted for and made additions under section 69C as the assessee failed to establish the source of the expenditure.

On appeal, CIT(A) deleted the additions made by AO and the matter reached before the Mumbai Tribunal.

ITAT Held

The Tribunal held that the design agreement entered between the assessee and the interior designer was made after the date of search. Since there was no operative agreement between the assessee and the said interior designer, there was no question of incurring any expenditure during the year under consideration.

Further, the seized annexure being a scanned copy did not contain the name of the assessee anywhere. The said document was found and seized from the residential premises of a third party. Therefore, the presumption was that the said document pertains to such third party. As the name of the assessee was nowhere mentioned in the said document the presumption that it belongs to the assessee did not hold any water and most importantly it did not bear any signature neither of the AO nor of the assessee nor of any witnesses to suggest that it was impounded during the search proceedings.

Accordingly, the additions made by AO were to be deleted.