> **Order:** ITA Nos. 927 & 928/Ind/2024 (ITAT Indore), Assessment Years 2015-16 and 2014-15, against the CIT(A)-3 Bhopal common order dated 23.10.2024, pronounced 21.01.2026.

## Facts

The dispute arises from additions under section 69 founded on loose papers and alleged hundis seized from a third party's premises during a search on an unrelated group.
The Commissioner (Appeals) had confirmed additions of Rs.2,00,000 for AY 2014-15 and Rs.1,00,000 for AY 2015-16, correlating the seized hundis with post-dated cheques and relying on the searched person's admission, while rejecting the objections that the papers bore no full name, signature or PAN.

## Issue

Whether section 69 additions on third-party seized papers survive where the papers are not shown to belong to the assessee, the deponent is never produced, and no fund flow is proved.

## Holding

The additions rested solely on two inventory pages neither found in the assessee's possession nor control, bearing no complete name, address, PAN or signature — a mere "first-name-only" reference without corroboration cannot establish belonging.
The assessee was never confronted with the third party's statement and given no cross-examination, a natural-justice violation: material used against the assessee must be put to him for rebuttal.
The assessee, a salaried accounts officer with nothing on record showing a cash-lending business, faced no enquiry into financial capacity or actual fund flow — additions on presumption and surmise.
The papers also lacked hundi essentials — no tripartite drawer-drawee-payee arrangement, no signed unconditional payment order.
With no specific incriminating material belonging to the assessee bearing on these years, the section 69 additions were unsustainable, both were deleted, both appeals allowed, and the order pronounced on 21.01.2026.

## Why a client would care

A 153C addition from someone else's seized papers is tested on belonging, confrontation and fund flow — fail all three and the addition collapses before quantum is even reached.

## Questions clients ask

**Q1. Additions were made on seized papers carrying only a first name. What was the outcome?**

Both additions were deleted and both appeals allowed.

**Q2. Why did the papers not establish that they belonged to the assessee?**

They bore no complete name, address, PAN or signature, and were never found in the assessee’s possession or control.

**Q3. Was any enquiry into fund flow or financial capacity made?**

None appears on record, and the papers also lacked the essentials of a hundi — no tripartite arrangement and no signed unconditional payment order.

## Disclaimer

*This note summarises a Tribunal order for general information. It is not professional advice and does not predict the outcome of any other case. Tax and company-law positions depend on facts and dates; take a written opinion before you act. Harun Raaj & Associates is a Chartered Accountants firm in Visakhapatnam.*

Canonical: https://www.harunraaj.com/blog/itat-s-69-on-third-party-loose-papers-fails-no-belonging-no-927-ind-2024