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2022 (4) TMI 321 - AT - Income TaxUndisclosed investment - Addition based on loose sheet found in search - HELD THAT:- AO has not made any further enquiry with any other parties and made the addition based only on the loose sheet of paper found during course of survey action. AO has made addition as unexplained investment which is not sustainable in law. Further, it can be seen from the loose sheet that working made are stated to be estimation only that cannot be a base for making addition by the AO under section 69 of the Act. As held by the Ld. CIT(A) in his order, the partnership firm has been constituted on 3.2.2011 with no business and no receipt of any booking for the project, cannot have the fund at its disposal to have the amount to the tune of ₹ 10.10 crores to pay to Smt. Nitaben Patel. Therefore, this particular hypothesis does not hold water and stand the probability. We also concur with the finding that the Ld. CIT(A) that, if ₹ 10.10 crores is added in the hands of the assessee, as done in the impugned assessment, the project cost and the work-in-progress have to be enhanced by that amount, and consequently the profit would go down or the project would end up in loss and that the effect of addition made in the hands of the assessees firm as made in the assessment order would get neutralized/nullified over the period of the project. On this count also the addition made is not correct. During the search action under section 132 on 7.1.2014 in Bafna Panchal group of cases which covered the residential premises of Smt. Nitaben Patel, there is no record to show any incriminating materials relating to the purchase of this land was seized by the Revenue/Income Tax Department. Therefore, the addition made u/s. 69 of ₹ 10.10 is not sustainable in law and we are in conformity with the orders passed by the Ld. CIT(A) on this issue.- Decided against revenue.
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