MOHD. ALAM,MORADABAD vs. DCIT, CIRCLE- 1, MORADABAD

PDF · subscribers
ITA 4519/DEL/2019Status: DisposedITAT Delhi09 July 2025AY 2015-167 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the addition of INR 5 Lakhs for AY 2015-16. The Tribunal noted that while the assessee claimed the cash was from the business of purchase and sale of trucks, and provided the name of a buyer, no other evidence was filed. Therefore, it could not be said that the entire profit was from this business, and the order of the lower authorities was found to have no infirmity. For AY 2016-17, the Tribunal upheld the addition of INR 10,90,000. The Tribunal observed that the assessee initially claimed INR 8 Lakhs belonged to his father from land sale, but later changed his stand to truck sale proceeds. While a sale agreement for a truck was filed, showing cash receipts of INR 2 Lakhs on 16.10.2014, INR 4 Lakhs on 06.12.2014, and INR 3 Lakhs on 01.04.2015, the Tribunal found it unacceptable that the entire cash received was kept by the assessee. Furthermore, no proper explanation was provided for the remaining INR 1.90 Lakhs. Consequently, the addition was upheld. Both appeals were dismissed.

What were the facts?

The assessee, Mohd. Alam, is an individual whose appeals for Assessment Years 2015-16 and 2016-17 are before the Income Tax Appellate Tribunal (ITAT), Delhi. The appeals challenge orders of the Commissioner of Income Tax (Appeals) [CIT(A)], Moradabad, which confirmed additions made by the Assessing Officer (AO). The case originated when the assessee was intercepted at LNJP Airport, Patna, on April 17, 2015, with INR 10,90,000 in his possession, of which INR 10,50,000 was seized. Assessment proceedings under Section 153A were initiated. The AO made an addition of INR 5 Lakhs for AY 2015-16 and an addition of INR 10,90,000 for AY 2016-17. The CIT(A) deleted an estimated income addition for AY 2015-16 but confirmed the INR 5 Lakh addition. For AY 2016-17, the CIT(A)'s order is not explicitly detailed but the appeal grounds suggest confirmation of the cash addition.

What were the issues?

1. Whether the addition of INR 5 Lakhs, confirmed by the Ld.CIT(A) for AY 2015-16, is justified, considering the assessee's claim of illiteracy and income from truck sales? (Mixed question of law and fact, turning on Section 143(3) of the Income Tax Act, 1961). Assessee's contention: The addition should be deleted as the assessee is illiterate and has shown receipts from all sources. During the search, the assessee stated he sold a truck for INR 18 Lakhs, receiving INR 9 Lakhs in cash, which was available with him. He also has regular income from truck purchases and sales. Revenue's contention: The assessee was found in possession of INR 10,90,000, and after allowing INR 5,90,000, the remaining addition deserves to be upheld. 2. Whether the addition of INR 10,90,000, representing cash found in the assessee's possession on April 7, 2015, for AY 2016-17, is justified, considering the assessee's explanation of the source of funds? Assessee's contention: The assessee initially stated INR 8 Lakhs belonged to his father, received after selling agricultural land. However, he later changed his stand, attributing the cash to the sale of a truck (UP21AN-8373) for INR 18 Lakhs, of which INR 9 Lakhs was received in cash. He also claimed income from truck repairing business. Revenue's contention: The assessee failed to provide evidence for the source of cash, neither to the AO nor to the CIT(A). The change in stand before the Tribunal should not be accepted, and the addition should be confirmed.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 153A,Section 131(1A),Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI “E” BENCH: NEW DELHI

Before: MS.MADHUMITA ROY & SHRI MANISH AGARWAL

For Appellant: Shri Mayank Patwari, Adv. &, Shri Akash Ojha, Adv
For Respondent: Ms. Amisha S.Gupta, CIT DR
Hearing: 07.05.2025Pronounced: 09.07.2025

ORDER PER MANISH AGARWAL, AM : Both captioned appeals are filed by the assessee against the two separate orders, both dated 08.03.2019 passed by Ld. Commissioner of Income Tax (A), Moradabad [“Ld.CIT(A)”] in Appeal No.322/ACIT-I/MBD/2017-18 and in Appeal No.323/ACIT- I/MBD/2017-18 passed u/s 250(6) of the Income Tax Act, 1961 [“the Act”] arising from the assessment orders, both dated 29.12.2027 passed u/s 143(3)/153A and u/s 143(3) of the Act pertaining to assessment year 2015-16 and 2016-17 respectively.

2.

Since in both appeals, issues are common, therefore, both appeals are decided by a common order for the sake of convenience and brevity. First we take appeal of the assessee in AY 2015-16.

1.

[Assessment Year : 2015-16] 3. The assessee has raised following grounds of appeal:- 1. “The Ld.CIT(Appeals) erred in law and on facts on both while confirming the addition of Rs.5 lac by the Ld.AO.

2. The ld.CIT(Appeals) erred in law and on facts and confirming the addition of Rs.5 Lac made by the Ld.AO by alleging that he has given the details of the trucks sold, so it cannot be said that the statement was given out of ignorance without considering the fact that the assessee is a illiterate person and also shown the receipts from all sources in his gross receipts for the year under consideration.

3. Any other ground of appeal which may be raised during the course of hearing of appeal.”

4.

Brief facts of the case are that the assessee is an individual and was intercepted at LNJP Airport, Patna on 17.04.2015 by the Income Tax Department. A sum of INR 10,90,000/- was found in the possession of the assessee out of which an amount of INR 10,50,000/- was seized and assessment proceedings u/s 153A of the Act were initiated. In response to notice u/s 153A issued on 24.02.2016, no return was filed thereafter, notices u/s 142(1) of the Act were issued on various dates and finally on 01.12.2017, the assessee e-filed the return of income, declaring total income at INR 2,86,540/-. Thereafter, the AO referred the statements of the assessee recorded u/s 131(1a) of the Act with regard to the source of cash found during the course of search. The assessee claimed that he is engaged in the business of transportation and the cash found during the course of search was on account of purchase and sale of trucks. The AO made the addition of INR 5 Lakhs besides estimating the income of the assessee at INR 1 Lakh per month and made addition of INR 9,13,460/- after reducing the return of income of INR 2,86,540/-. Accordingly, the AO passed the assessment order u/s 143(3) of the Act on 29.12.2017.

5.

Against this order, the assessee preferred appeal before the Ld.CIT(A) who vide impugned order dated 08.03.2019, deleted the addition made on account of estimation of income however, confirmed the addition of INR 5 Lakhs.

6.

Aggrieved by the order of Ld.CIT(A), the assessee is in appeal before the Tribunal.

7.

During the course of hearing, Ld.AR reiterated the same facts as were made before the lower authorities and relied upon the statements given during the course of search wherein in reply to question No.27, the assessee has stated that he has sold one truck for INR 18 Lakhs to one Shri Mohd. Nasir of Moradabad (U.P) from whom he has received INR 9 Lakhs which were available with him at the time of search. Besides this, he has regular income from purchase and sales of trucks which is available with him. He therefore, prayed that the addition made and uphold deserves to be deleted.

8.

On the other hand, Ld.CIT DR for the Revenue supported the orders of the authorities below and submits that the assessee having possession of INR 10,90,000/- out of which lower authorities have already allowed INR 5,90,000/- therefore, remaining addition deserves to be uphold and shall prayed accordingly.

9.

Heard both the parties and perused the material available on record. From the facts of the case, it is seen that since beginning of the proceedings, the assessee was claiming that the cash was accumulated out of business of purchase and sale of trucks further in the statement recorded u/s 131(1a) of the Act. The assessee intercepted on 07.04.2015 at LNJP Airport, Patna and stated that he had started the activity of purchase and sale of trucks in the year itself. As no evidences were filed by the assessee except the name of the party to whom truck was sold therefore, under these facts, it cannot be said that the entire profit is from the said business. In view of these facts , we find no infirmity in the order of lower authorities and accordingly, the addition made is hereby, uphold.

10.

In the result, appeal of the assessee is dismissed.

[Assessment Year : 2016-17]

11.

Now we take appeal of the assessee in (Assessment Year 2016-17).

12.

The grounds of appeal raised by the assessee are in relation to the addition of INR 10,90,000/- made towards the cash found in possession of the assessee on 07.04.2015 when he was searched by the Income Tax Department at LNJP Airport, Patna. The assessee since beginning was stating that the cash found from his possession was out of his business of purchase and sales of trucks and part of the amount was belonged to his father.

13. Before us, Ld.AR of the assessee stated that the assessee under pressure wrongly stated the fact that INR 8 Lakhs belong to his father however, the fact was that this amount related to sale proceeds of the truck No.UP21AN-8373 which was sold at INR 18 Lakhs out of which INR 9 Lakhs were received in cash which were available with the assessee at the time of search. He further submits that remaining sale consideration of INR 9 Lakhs paid by the buyer directly to the bank from where the truck was financed. He further submits that assessee was in the business of repairing of trucks therefore, the remaining amount is from such business. He therefore, prayed that the addition made on this score be deleted.

14. On the other hand, Ld.CIT DR for the Revenue supports the order of the lower authorities and submits that the assessee has not been able to submit the source of cash available with him during the course of search even before the AO also. He had not produced any supporting evidences to establish that cash was received from his father or out of his business activities. Before Ld.CIT(A), the same arguments were taken by the assessee however, before the Tribunal, assessee has changed the stand and therefore, Ld.CIT DR submits that the claim of the assessee should not be accepted and addition be confirmed.

15. Heard both the parties and perused the material available on record. The cash of INR 10,90,000/- was found from the possession of assessee during the course of search at LNJP Airport, Patna on 07.04.2015 in the statement recorded u/s 132(4) of the Act. It was stated by the assessee that out of INR 10,90,000/-, a sum of INR 8 Lakhs were belonged to his father who had given this amount to the assessee after sale of 4 bighas agricultural land and the remaining is the saving out of assessee’s whole income. When the assessee was asked to produce the evidences or sale of land of his father, assessee changed his stand and stated that cash was accumulated on account of sale of a truck for INR 18 Lakhs out of which INR 9 Lakhs was received in cash for which assessee has filed the Sale Agreement and the transfer documents of the truck. From the perusal of the Agreement, it is seen that assessee has received INR 2 Lakhs in cash on 16.10.2014, INR 4 Lakhs on 06.12.2014 and INR 3 Lakhs on 01.04.2015. It is not acceptable that the cash received was kept by assessee. Further, no proper explanation is given for the remaining amount of INR 1.90 Lakhs. In view of these facts, the addition of INR 10,90,000/- made is hereby uphold.

16.

In the result, appeal of the assessee is dismissed.

More judgments on Section 153A

All 18,957 judgments and leading authorities on Section 153A →

Recent GST High Court judgments

Search GST case law →