No Section 153A Additions On Suspicion | ITAT

Case Details: RG Home Furnishing (P.) Ltd. vs. Deputy Commissioner of Income-tax - [2025] 181 taxmann.com 72 (Delhi - Trib.)

Judiciary and Counsel Details

• Anubhav Sharma, Judicial Member
• S. Rifaur Rahman, Accountant Member
• Jasmeet Singh, Pranav Menon, Pushpendra Bhadurya, Advs. & Aseem Chawla, Sr. Adv. for the Appellant.
• Jitender Singh, CIT-DR for the Respondent.

Facts of the Case

A search operation was conducted at the business premises of Garg Group of companies. The assessee was one of the concerns of the group, and its books of account were also found during the search.

During the assessment proceedings, the Assessing Officer (AO) noted that machinery worth Rs. 10.52 crores had been shown as purchased from four concerns. Incriminating material and blank letterheads were also found on the assessee’s hard disk.

He concluded that the assessee was involved in circular transactions, in which the sale consideration received by the said companies was ultimately returned to the assessee company or its sister concerns. The companies were also not found to exist at the addresses mentioned, and the handwriting on the bills of all four concerns was the same.

Accordingly, he disallowed expenses and depreciation claimed by the assessee and levied a penalty under section 271(1)(c). On appeal, the CIT(A) upheld the order of the AO. Aggrieved by the order, the assessee filed the instant appeal before the Tribunal.

Tribunal Held

The Tribunal held that the entire case of the AO was based on suspicion arising from the blank letterhead found during the search. The coordinate Bench has held that these seized materials are dumb documents and cannot be made the basis for any addition.

Thus, based on the aforesaid findings, it is viewed that on first principles nothing further is required to be examined as the whole case of the AO was based on suspicion arising out of the blank letterhead found during the search, which the co-ordinate Bench has held to be a ‘dumb document’.
Thus, making any addition to the dumb documents in the assessment completed under section 153A read with section 143(3) was also not justified.