Uncorroborated diary entries cannot sustain capital gains addition without independent proof of higher sale consideration.

ITAT Amritsar held that an addition towards long-term capital gains based solely on diary entries seized from the assessee's residence could not be sustained without corroborative evidence. The diary was not established as a regularly maintained book of account, and no independent material, such as purchaser confirmation or other supporting proof, was produced to show receipt of higher sale consideration. The presumption under section 292C was treated as insufficient on these facts to fasten tax liability merely on unverified loose notings. The addition was therefore deleted and the assessee succeeded.

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Issues: Whether the addition made towards long-term capital gains on the basis of diary entries seized from the assessee's residence was sustainable in the absence of corroborative evidence.

Analysis: The addition rested entirely on notings in a diary said to reflect higher sale consideration than the registered deed. The diary was not shown to be a book of accounts regularly kept in the course of business, and the entries were not corroborated by any independent material, such as confirmation from the purchaser or other supporting evidence. The presumption under section 292C could not, on these facts, be treated as conclusive to fasten tax liability merely on the basis of unverified diary entries. The reasoning also treated such loose notings as insufficient by themselves to prove an on-money receipt.

Conclusion: The addition was not sustainable and was deleted in favour of the assessee.

Final Conclusion: The assessee's appeal succeeded because the impugned addition was based only on uncorroborated diary notings and could not be upheld as taxable income.

Ratio Decidendi: Uncorroborated diary or loose-sheet entries, by themselves, cannot justify an addition under the Income-tax Act where the alleged receipt is not independently proved.

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