ITAT Ruling: DCIT Vs Shally Thapar

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has delivered a significant ruling regarding the evidentiary value of loose documents recovered from third parties during search and seizure operations. In the case of DCIT Vs Shally Thapar, the Tribunal dismissed the Revenue's appeal, holding that additions under Section 69C of the Income Tax Act 1961 cannot be sustained solely based on a loose computation sheet found in the possession of a third party, particularly when devoid of corroborative evidence.

Case Background and Facts

The dispute arose following a search and seizure operation conducted on 23.03.2022 involving Shri Amarjit Singh Sethi and others. During the proceedings, authorities recovered incriminating material, specifically a loose sheet found in a car belonging to Shri Amarjit Singh Sethi.

This document contained a computation of interest regarding a loan amount of Rs. 6.62 Cr. During the search, Shri Sethi stated on oath that the computation pertained to a loan extended by his mother-in-law, Smt. Dolly Sabharwal, to the assessee, Shri Shally Thapar. The sheet indicated calculated interest amounts purportedly receivable from the assessee.