Unsigned Draft Agreement Has No Evidentiary Value Without Independent Inquiry by AO, ITAT Deletes ₹13 Lakh Addition

The Income Tax Appellate Tribunal (ITAT) ruled that an unsigned draft agreement cannot be relied upon as evidence unless verified through independent inquiry by the Assessing Officer (AO). In this case, the AO had added ₹13 lakh to the taxpayer’s income based on a draft agreement that was neither signed nor authenticated. The Tribunal emphasized that an addition without verification violates principles of natural justice and proper assessment procedures. It clarified that relying solely on preliminary or incomplete documents is insufficient to establish a tax liability. The ruling reinforces the need for AOs to conduct due diligence and corroborate documents before making any additions, ensuring fair treatment of taxpayers.