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2021 (6) TMI 197 - AT - Income TaxAddition on noting made in scribbling pad found and seized - HELD THAT:- In the instant case, the AO has completely brushed aside the explanation of the assessee on the contents of the diary. AO has not taken into account, the contents of the scribbling pad and the explanation of the assessee together while making the assessment. AO has not even considered the gross amounts mentioned in the diary. He has enhanced the gross receipts with designing charges / commission which was deducted at source. AO ought to have considered the entire material available in the diary in toto together with the explanation offered by the assessee. If the AO had considered entire material i.e., diary along with the explanation offered by the assessee, there is no case for making the addition in the instant case. Thus, the case laws above are squarely applicable to the assessee’s case. AO in the assessment order for the A.Y. 2016-17 given a finding that noting is nothing but unaccounted profit earned from various businesses run by B.Venkateswarlu and his two sons and observed that out of this unaccounted profit, they were using the unaccounted profit for money lending business, personal drawings and unaccounted reserve. From reading of the assessment order, it is clear that the AO himself has accepted that the notings mentioned in the diary does not pertain to the assessee company, hence, the AO did not make out a case that the notings made in the diary was related to the assessee company. Thus the addition made by the AO in the hands of the company is unsustainable, hence, we uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue.
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