ACIT, CENTRAL CIRCLE-1, PATNA, PATNA vs. SUMAN KUMAR, GAYA

The present appeal emanates from the order u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’) passed by Commissioner of Income Tax (Appeals)-3, Patna dated 02.03.2023. In this case, vide order dated 30.09.2021, the Assessing Officer has recorded that the assessee was apprehended with cash of Rs.58,00,000/- on a Lucknow to Patna Flight. It appears that the assessee deposed before the Investigation Wing Authorities initially that the entire amount was undisclosed and offered the said amount for taxation. However, during the assessment proceedings, it was submitted by the assessee that the seized amount included two loans of Rs.25,00,000/- and Rs.19,00,000/-. Also, the assessee made efforts to prove that the Rs.58,00,000/- was out of cash- in-hand. Finally, the assessee claimed that Rs.30,00,000/-, as undisclosed income from sand mining, could not be submitted in a Assessment Year: 2020-21 Suman Kumar revised return due to some technical issue. However, the Assessing Officer added this amount u/s 69A of the Act. 1.1 Before the ld. CIT(A), the assessee could succeed on most issues, except on the addition of Rs.30,00,000/-. Briefly, the ld. CIT(A) has re- appraised the evidence regarding the impugned transactions and before granting relief has noted that the Assessing Officer should have conducted more effective enquiries.

Aggrieved with this action of the ld. CIT(A), the revenue is in appeal before us through the following grounds of appeal: “i. That on the facts and circumstances of the case, the learned Commissioner of Income-tax (A)-3, Patna has erred both in law and on fact in deleting the addition of Rs. 58,00,000/- made in respect of unaccounted and unexplained money without appreciating the fact that the assessee did not furnish any corroborative documents which could establish that intercepted cash amount being brought from Lucknow by flight was recorded in his books of accounts. ii. That on the facts and circumstances of the case, the learned Commissioner of Income-tax (A)-3, Patna has erred both in law and on fact in deleting the addition of Rs. 44,00,000/- made as unexplained credits without appreciating the fact that the assessee failed to establish the identity, creditworthiness and genuineness of the two lenders from whom unsecured loans were claimed to have been taken as the assessee did not furnish confirmation from the alleged lenders and also failed to produce Cash Book to substantiate the cash in hand on 13.02.2020. iii. That the Ld. CIT(A) erred both in law and facts in accepting the reconciliation statement submitted by the assessee without considering the fact that assessee neither submitted the details of his sand business nor any proof of the source and purpose of carrying the cash to Lucknow. iv. That the Ld. CIT(A) erred in ignoring the fact that cash books, sale and purchase register were not produced by the assessee and the claimed receipts, profits and depreciation (in cash) were not supported by any material. v. That the Ld CIT(A) erred in accepting the reconciliation statement ignoring the fact that in the statement recorded on oath on 13.02.2020 during the search and seizure u/s 132(1) the assessee accepted that the 2 Assessment Year: 2020-21 Suman Kumar investment as well as earning from sand business is completely unaccounted and not recorded in any books of accounts. vi. That the Ld CIT(A) erred both in law and in facts to accept the concocted reconciliation where net proceeds from guest house, rental income and even interest subsidy is claimed to be in cash, with remanding the matter to AO for verification. vi. petitioner/revenue craves leave to amend, modify and or alter grounds and or to adduce and rely upon such further evidences and or documents as may be required at any time before and during the time of hearing.” 2.1 Before us, the documents and orders of authorities below have been gone through with the help of ld. AR. The ld. DR chose to recuse himself from this case as he was the author of the impugned order. The ld. AR supported the findings of the ld. CIT(A) and relied on the same.

Before parting with this issue, it deserves to be mentioned that the so-called income from guest house and rental income claim has been challenged by the department even though no specific addition has been made on this account. Since, we are remanding back this matter to the file of the Assessing Officer, we do not deem it necessary to adjudicate each and every ground of appeal