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2019 (3) TMI 1133 - AT - Income TaxAddition as a result of search conducted wherein loose sheet found - Additions based upon selective scribbling in rough note de hors - HELD THAT:- Addition in this case is a result of search conducted wherein loose sheet being page no. 9 and scribbling in front of the said page is the sole basis. While analyzing the scribbling as mentioned in the order of the A.O. reproduced in para 5 above, the A.O. has considered that it reveals undisclosed sales of ₹ 5.22 crores and cash component of ₹ 4.32 crores which has been added to the income of the assessee. CIT(A) while considering the issue has noted that the scribbling in the said front side of page no. 9 show that the disclosed profit would be ₹ 4.62 crores. Hence, he was of the opinion that only ₹ 4.62 crores can be added and no further addition is justified. In this regard, we note that the A.O. in his order has noted that on the reverse side of page no. 9, the assessee has noted sales of ₹ 5.82 crores. That the assessee has recorded sales of ₹ 4 crores based on total expenses of ₹ 17 crores. However, the A.O. has rejected this notings by observing that loss of ₹ 4 crores is not actually a loss, since unsold stock has not been included in this calculation which has been done on the front page where the figure arrived is ₹ 4.62 crores. Submissions of the assessee that loose sheet scribbling are merely estimates and de hors any corroborative evidence, the additions solely based on these loose sheets scribbling cannot be made has considerable cogency. The said loose sheet was found from the residence of one of the partners. It does not mention the name of the assessee firm directly or indirectly. Moreover, the said notings are also not claimed to be recorded in the handwriting of Shri Shankarlal Virji Thakkar or any other partners of the assessee firm. In this regard, we place reliance upon the Hon'ble Apex Court decision in the case of CIT vs. P. V. Kalyanasundaram [2007 (9) TMI 25 - SUPREME COURT OF INDIA], wherein it was held that the addition solely based upon loose sheets scribbling de hors any corroborative findings, is not justified. We hold that the additions based upon selective scribbling in rough note de hors any corroborative finding, is not justified. Moreover, if the scribbling in the note is examined on the touch stone of the common law maxim of approbate and reprobate, the addition is further not justified. 20. In the result, this appeal by the Revenue is dismissed and that by the assessee stands allowed.
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