Diary Entries Lacks Evidentiary Value

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) deleted an addition towards alleged long-term capital gains that had been made solely on the basis of diary entries seized from third-party real estate brokers during a search operation. 

The Tribunal held that where identical additions based on the same diary had already been deleted in the cases of co-sellers and related parties, and those findings had attained finality, the Revenue could not selectively sustain the addition in the hands of one co-owner. 

Reaffirming the principle that uncorroborated third-party diary notings do not constitute reliable evidence of an actual transaction, the Tribunal allowed the appeal in favour of the assessee.