“Revenue not Justified in Addition made based on Rough Noting on Loose Sheets”: ITAT quashes S.40 Income Tax Addition

The ITAT quashed an addition under Section 40 of the Income Tax Act, ruling that rough notings on loose sheets cannot justify revenue addition. The Tribunal stated that evidence must be substantial and verified, and rough or unaccounted notings do not meet this threshold. In this case, the taxpayer contested the revenue’s reliance on rough notings as sufficient grounds for income additions. The ITAT agreed, citing insufficient concrete evidence and improper application of the law by the authorities, and ordered the addition to be quashed.