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Facts
During a search and seizure operation, a diary was seized from the assessee containing details of loans and advances. The Assessing Officer made two additions based on these entries: Rs. 2,67,500/- for undisclosed investment and Rs. 9,600/- for interest on cash loans. The CIT(A) upheld these additions.
Held
The Tribunal held that the addition of Rs. 2,67,500/- was not sustainable as the diary entries lacked dates, making it impossible to ascertain if they pertained to the relevant financial year. Similarly, the addition of Rs. 9,600/- for interest on cash loans was not sustained due to a lack of material suggesting any cash loan was advanced.
Key Issues
Whether additions based on undated entries in a seized diary are sustainable, and whether interest on alleged cash loans can be added without proof of loan advancement.
Sections Cited
250, 132, 133A, 153A, 143(2), 142(1)
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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC-Bench” JAIPUR
Before: SHRIGAGAN GOYAL, AM& SHRI NARINDER KUMAR, JM
vkns'k@ORDER PER: NARINDER KUMAR, JUDICIALMEMBER .
On 22.05.2025, Learned CIT(A) passed order u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), against the assessee- appellant, thereby dismissing his appeal, relating to the assessment year 2013-14, and upholding the assessment order dated 14.04.2021, whereby two additions i.e. one of Rs. 2,67,500/- on account of undisclosed Kamlesh Kumar Sharma, Jaipur investment/unaccounted business of lending cash and the other of Rs. 9,600/-, by way of interest on the cash loan advanced during F.Y. 2012-13, were upheld.
Arguments heard. File perused.
As per record, on 06.09.2018, a search and seizure action u/s 132 of the Act, and /or survey action u/s 133A of the Act, was carried out by the Income Tax Department, on the members of Oswal Shop Group, of which the assessee is stated to be one of the members.
On 16.07.2019, notice u/s 153A of the Act was issued and served upon the assessee, whereupon the assessee filed return of income declaring his income of Rs. 1,98,200/-. The Assessing Officer perused the return of income. Ultimately, notice u/s 143(2), followed by notices u/s 142(1) of the Act, came to be issued to the assessee.
As per allegation leveled by the department, during the above said search proceedings, from the residence of the assessee in the area of Santipur, Durgapura, Tonk Road, Jaipur, a diary was seized, in proof of which inventory was prepared.
Kamlesh Kumar Sharma, Jaipur Said diary was found to contain details of loans and advances, which according to the Assessing Officer, remained undisclosed. Details of the 15 pages of the diary were recorded in the form of an Excel Sheet. Same have been reproduced at page 5 and 6 of the assessment order.
On perusal of the abovesaid entries, it transpired that at serial no. 1, as regards F.Y. 2012-13 (assessment year 2013-14), there was an entry of interest of Rs. 9,600/- received by the assessee on 06.05.2012. As noticed above, one of the two additions pertains to the said entry of Rs. 9,600/-.
Ld. AR for the appellant, has raised only one contention before us i.e. the other addition of Rs. 2,67,500/-, has been made without taking into consideration that in the diary, no date of the entries at pages No. 7 to 9 of the said diary found mentioned, but the Assessing Officer considered as if 5 entries i.e. at page no. 7, another entry at page no. 8, and still another at page no. 9 pertained to the financial year 2011-12.
The contention is that in absence of any date regarding the said entries, the Assessing Officer could not observe that the said 5 entries pertained to the F.Y. 2012-13.
Kamlesh Kumar Sharma, Jaipur 7. Ld. DR for the department admits that as regards the Financial Year 2012-13, the only entry of receipt of interest of Rs. 9,600/- was of 06.05.2012.
It is also not in dispute that other entries, on the basis of which addition of Rs. 2,67,500/- was made, did not bear any date.
In the given situation, we find merit in the contention raised by Ld. AR for the appellant that in absence of any date as against the 5 entries available at page no. 7 to 9, the Assessing Officer could not frame assessment while treating said entries as if the same pertained to the F.Y. 2012-13.
Consequently, said addition of Rs. 2,67,500/- deserves to be set aside.
As regards the second addition of Rs. 9,600/-, stated to be the ground of interest on cash loans, when there is nothing on record to suggest that any cash loan was advanced by the assessee during F.Y. 2012-13, but, in absence of any material from the side of the department, as to the transaction of advances or loans, such addition of receipt of interest during F.Y. 2012-13 also cannot be sustained.
In view of the above discussion and findings, the impugned order passed by Learned CIT(A) deserves to be set aside. Consequently, the appeal is allowed and the impugned order is set aside.
File be consigned to the record room after the needful is done by the office. Order pronounced in the open court on 26/09/2025.
Sd/- Sd/- ¼xxu xks;y½ ¼ujsUnz dqekj½ (GAGAN GOYAL) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 26/09/2025 *Santosh आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू The Appellant- Kamlesh Kumar Sharma, Jaipur. 1. 2. izR;FkhZ@ The Respondent- ACIT, Central Circle-2, Jaipur. 3. vk;djvk;qDr@ Theld CIT 4. विभागीय प्रतिनिधि] आयकरअपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZQkbZy@ Guard File By order,
सहायक पंजीकार@Aेेजज. त्महपेजतंत