Interpolation of seized material – There are no other materials – Notings recorded on the seized material found with the searched person other than the assessee- SLP Dismissed-

The assessee is a partnership firm. There was a search and seizure operation under section 132 on 1st September 2004 in the case of Raut Group of Cases (Rauts) and one Shri Sandeep S Deo. Pertinently, there is no search on the assessee. The search of Raut and Deo resulted in seizure of various documents from their premises. The statements of both were recorded. The discovery and the seizure of page 82 of loose paper bundle no.1 from the premises of Deo and seizure of page 42 to 46 from the premises of Rauts is claimed to be an important one. The issue in the Appeals is in relation to additions by way of estimation of sale of TDRs

The assessee had sold a total of 2,16,507.10 sq.ft of Transferable Development Rights (“TDR”). Out of this, sale of 4133 sq.mt of TDR is mentioned at page 82 of the document. On the facts of the case, the Tribunal directed that as against the rate of Rs.225/applied by the Assessing Officer, the rate of Rs.220/should apply to work out unaccounted receipts. However, the Tribunal directed that this rate should be applied only in respect of TDR of 4133 against the entire sale of 21,650 sq.mt.

The Tribunal held that apart from the loose sheet page 82 and page 42 containing an unsigned copy of the Agreement indirectly confirming the contents of page 82, there are no other materials. Therefore, there is no material to estimate the sale of other TDR’s. The above documents at best would enable estimation of those TDR’s mentioned at page 82. The page 42 is also not conclusive evidence and merely relying on certain notings recorded on the seized material found with the searched person other than the assessee. It also refers to the second limb about failure to take cognizance of direct evidence such as confirmation letter by the respective purchasers of TDR. The Tribunal dismissed the revenue’s Appeals.

Aggrieved by the ITAT order, Revenue filed an appeal before High Court. The Hon. High Court dismissed the appeals affirming the order of the ITAT. The High Court observed that there is no material to estimate the sale of other TDR’s.

The Revenue filed SLP before Supreme Court which was dismissed.