ASHOK KUMAR AGARWAL,HYDERABAD vs. ACIT., CIRCLE-3(3), HYDERABAD

आदेश / O R D E R PER MANJUNATHA.G, AM:

This appeal filed by the assessee is directed against the order of the

Commissioner of Income Tax (Appeals), Hyderabad-11, dated

11.03.2025, and pertains to assessment year 2020-21.

the appeal has been filed belatedly by ‘91’ days and in order to explain :: 2 :: the delay, he drew our attention to the application filed for condoning the

delay along with the affidavit supporting the averments made therein.

Having gone through the contents of the application for condonation of

delay supported by medical documents, we are inclined to condone the

delay and proceed to hear the appeal on merits.

who filed his return of income (RoI) for AY 2020-21 on 09.01.2021

declaring total income of Rs.13,25,790/-. A search and seizure operation

u/s.132 of the Income Tax Act, 1961 (in short “the Act“) was conducted

in the case of the assessee on 04.06.2019. During the course of search,

at the residential premises of the assessee an amount of Rs.1 Cr. cash

and ‘12’ gold biscuits weighing ‘1200’ grams were also found. When

assessee was asked about the source of cash, he stated that cash belongs

to himself and his family proprietary concerns i.e. M/s. Ankit Industries,

M/s. Ankit Marketing & M/s. Brijwasi Industries. The assessee had also

furnished cash book of above three firms and as per the cash book which

was referred to in Q.No.13 of statement recorded during the course of

search cash balance was at Rs. 6,73,805/-. The assessee further stated

that he was unable to explain source and supporting documents for the

above cash. Similarly, in respect of ‘12’ gold bars found during the course

of search, he expressed his inability to explain the source and

documentary evidence for the gold and admitted, additional income of

Rs.39,84,000/- in respect of gold found during the course of search.

assessement proceedings, the AO called upon the assessee to explain

source for cash and ‘12’ gold bars found during the course of search. In

response, the assessee furnished the list of persons indicating cash

balance and filed list of ‘9’ persons including three proprietary concerns

referred to during the course of search, and claimed that the cash of Rs.1

Cr. found during the course of search was explained out of cash balance

held by ‘9’ persons and in support of his claim, assessee filed affidavits of

‘9’ persons. Similarly, the assessee claimed that ‘12’ gold bars found

during the course of search were purchased by him for the purpose of his

son’s marriage and the same has been recorded in the books of accounts

for FY 2008-09, 2015-16 & 2016-17.

and also taking note of the explanation with regard to source of Rs.1 Cr.

cash found during the course of search observed that, in spite of

providing ample opportunities, the assessee has not submitted any

documentary evidences including cash book to prove the source for cash

found and no break up of cash in the case of family members. The AO

further noted that at the time of search, the assessee has claimed that

cash found during the course of search was belongs to three proprietary

concerns and also furnished cash book extracts and as per the cash book :: 4 :: extracts, the total amount available as on 04.06.2019 in the hands of the

three proprietary concerns was at Rs.6,73,805/-. In so far as remaining

six people, except filing affidavit, the assessee has not furnished any

evidence to substantiate the cash balance. Therefore, rejected the

explanation of the assessee with regard to source for cash found during

the course of search. Further, with regard to gold bullion found during the

course of search, the AO observed that, assessee except stating that the

same were purchased in the previous years but has not submitted any

evidence for purchase of said bullion along with copy of bank statement.

The assessee time and again changed his explanation according to his

whims and wishes without any documentary evidence. Therefore,

observed that, the assessee has not provided any evidence to prove the

source for the cash and gold bullion found amounting to Rs.1,39,84,000/-

and thus, rejected the explanation of the assessee and added back to the

total income treating as unexplained and taxed u/s.115BBE of the Act.

appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee has filed

detailed submissions on the issue which has been reproduced at Para

No.5 at Page Nos.14-16 of the order of the Ld.CIT(A). The sum and

substance of the explanation of the assessee before the Ld.CIT(A) is that

source for cash of Rs.1 Cr. found during the course of search has been

explained out of cash balance available with ‘9’ family members for which

the assessee has furnished affidavit along with their Permanent Account :: 5 :: Number (PAN). The assessee further submitted that, he purchased 12’

gold bars in ‘3’ financial years and the same is recorded in his books of

accounts. The Ld.CIT(A) forwarded the written submissions of the

assessee along with additional evidence to the AO for its comments and

the AO, in the Remand Report dated 28.04.2025 once again rejected

explanation with regard to source of cash and gold bullion found during

the course of search.

assessee and also taken note of the statements recorded from the

assessee during the course of search observed that, in the statement

recorded on 07.06.2019, the assessee confirmed that cash of Rs.1 Cr.

and gold bullion of Rs.39,84,000/- represented unexplained

money/bullion. Although, during the course of assessement proceedings,

the assessee claims that cash belongs to his family members including

three proprietary concerns but has not substantiated with relevant

documentary evidence except filing affidavit from the people. Further, as

per the cash book extract filed by three proprietary concerns i.e., M/s.

Ankit Industries, M/s. Ankit Marketing & M/s. Brijwasi Industries, total

cash balance as on 04.06.2019 was only at Rs.6,73,805/- and in respect

of remaining cash balance no substantive documentary evidence has been

furnished. The arguments of the assessee that his statement was

recorded by force is also not substantiated by offering any explanation.

Since the cash found during the course of search of Rs.1 Cr. has not :: 6 :: explained with known source of income, the AO has rightly made addition

towards cash balance as unexplained money.

assessee claims that gold bars was purchased in various previous financial

years but during the course of assessement proceedings and appellate

proceedings, no bills for purchase of bullion were filed and further source

of income for such purchase, etc., was explained. Therefore, observed

that merely for the reason order passed by the Commissioner of Customs

(Appeals) for release of gold bars would not be tantamount to explaining

the source. Therefore, rejected the explanation of the assessee and

sustained the additions made by the AO towards cash and gold bullion

found during the course of search for Rs.1,39,84,000/-.

appeal before this Tribunal.

CA, submitted that, the additions made by the AO towards cash and

bullion found during the course of search is unsustainable in law, because,

the AO has not made additions under any specific head of income and

therefore, in view of the decision of the Hon’ble Supreme Court in the

case of CIT v. B.C. Srinivas Setty reported in 1981 (2) SCC 460, the

additions made by the AO can’t be upheld. The Ld. Counsel for the

assessee further submitted that the assessee has explained source of cash deposits found during the course of search out of cash available with

‘9’ family members including three proprietary concerns. The assessee

had also furnished affidavit along with confirmations from the parties.

The AO summarily rejected the evidence submitted by the assessee and

made additions. The Ld. Counsel for the assessee further submitted that

‘12’ gold bars found during the course of search were purchased in

previous financial years and the same has been recorded in the books of

accounts. Further, once the purchase is recorded in the books of

accounts, the source stands explained. Therefore, the Ld.CIT(A) was

erred in observing that the assessee has failed to explain purchase of gold

bullion. Therefore, he submitted that the additions made by the AO and

sustained by the Ld.CIT(A) should be deleted. In this regard, he relied

upon the following judicial precedents:

• Govind Saran Gagan Saran Vs. Commr of Sales tax-Case Laws [in Civil Appeal No.2083 of 1974 dated 26.04.1985] • Umarcharan Shaw and Brothers Vs. CIT-Case Laws (1959) 37 ITR 271: 1959 SCC OnLine SC 142 • CIT Vs. Orissa Corporation P Ltd-Case Laws [in Civil Appeal Nos.1379-80 (NT) of 1974 dated 19.03.1986 • CIT Vs. Daulat Ram Rawatmull-Case Laws (1973) 3 Supreme Court Cases 133 • Lalchand Bhagat Ambica Ram Vs. CIT-Case Laws (1959) 37 ITR 288 : 1959 SCC OnLine SC 91 • Vinod Solanki Vs UOI and Another-Case Laws [2008] 16 Supreme Court Cases 537 : (2010) 4 Supreme Court Cases (Cri) 36 : 2008 SCC OnLine SC 1917 • The ACIT Vs. Shri Sudesh Kumar Gupta-ITAT Jaipur [in ITA No.976/JP/2019 order dated 09.06.2020]

of the Ld.CIT(A) submitted that, at the time of search, the assessee

couldn’t explain the source for cash deposits & ‘12’ gold bars and further

admitted that the value of cash and gold bars, is undisclosed income of

the assessee. Further, during the course of search, the assessee :: 8 :: explained cash balance of Rs.6,73,805/- from three proprietary concerns

in respect of ‘12’ gold bars, no explanation has been offered. Therefore,

the subsequent arguments of the assessee in light of affidavit filed by few

individuals without any supporting documents can’t be accepted. The AO,

after considering relevant facts has rightly made addition towards cash &

12’ gold bars. The Ld.CIT(A) after considering relevant facts has rightly

sustained the additions made by the AO. Therefore, he submitted that

the additions made by the AO should be upheld.

record and had gone through orders of the authorities below. We also

carefully gone through the relevant case laws referred to by the Ld.

Counsel for the assessee in support of his arguments, including the

decision of the Hon’ble Supreme Court in the case of B.C. Srinivas Setty

(supra). In so far as legal arguments taken by the Ld. Counsel for the

assessee in light of addition of Rs.1,39,84,000/-, in our considered view,

the AO has brought out clear facts and reasoning to come to a conclusion

that the cash and value of ‘12’ gold bars is unexplained money/bullion of

the assessee and therefore, in our considered view, merely for the

reason of not referring a specific section [Sec.69 to 69D] the additions

made by the AO towards unexplained cash and money can’t be

invalidated. Further, the case law referred to by the Ld. Counsel for the

assessee including the decision of the Hon’ble Supreme Court in the case

of B.C. Srinivas Setty (supra) are rendered under different sets of facts :: 9 :: and therefore, can’t be applicable to the facts of the assessee’s case.

Therefore, we reject the legal ground taken by the assessee challenging

the addition.

for Rs.1,39,84,000/-. Admittedly, during the course of search by the GST

authorities’ cash of Rs1 Cr. was found. Pursuant to GST search, the

department has initiated proceedings u/s.132 & statement u/s.132 (4) of

the Act was recorded from the assessee. The assessee failed to explain

cash of Rs.1 Cr. except filing cash book extract of three proprietary

concerns i.e., M/s. Ankit Industries, M/s. Ankit Marketing & M/s. Brijwasi

Industries and as per the cash book extract, cash balance was available

with proprietary concerns as on 04.06.2019 was Rs.6,73,805/-. At the

time of assessement proceedings, the assessee come out with a new

version of arguments and claimed that cash found during the course of

search, was belongs to ‘9’ family members including three proprietary

concerns, for which, the assessee has furnished break-up of cash

available with each family members along with their affidavit and PAN and

claimed that source for cash was out of cash balance available with the

family members. The AO rejected explanations of the assessee on the

ground that except making claim along with affidavit no further evidence

has been filed to explain the cash in the hands of the individual. Even

before us, the assessee makes a bold statement of cash in hand with ‘9’

family members referred in the assessment order but has not furnished :: 10 :: any details except affidavit. In our considered view, affidavit filed by ‘9’

individuals without any supporting evidence can at best be considered as

a self-serving document but not conclusive evidence of source available

with the individuals to explain the cash in hand. Since the assessee has

initially stated that he is unable to explain the source for cash found

during the course of search, for Rs.1 Cr. except to the extent of

Rs.6,73,805/- from three proprietary concerns, in our considered view,

the subsequent arguments made by the assessee during the course of

assessement proceedings with the help of affidavit of individuals can’t be

accepted. In so far as cash balance from three proprietary concerns,

right from the date of search, the assessee filed cash book extract, and as

per the cash extracts, cash balance with the proprietary concern as on

04.06.2019 was at Rs.6,73,805/-. Therefore, in our considered view, the

AO ought to have accepted explanation of the assessee to the extent of

Rs.6,73,805/-. Thus, we direct the AO to delete addition to the extent of

Rs.6,73,805/- being cash balance available with three proprietary

concerns which is a source for cash found during the course of search. In

respect of balance amount of Rs.93,26,195/-, the assessee couldn’t

explain source with known source of income and evidences. Therefore,

we upheld the addition made by the AO towards cash found to the extent

of Rs.93,26,195/-.

search for Rs.39,84,000/-. Once again, the assessee failed to explain the :: 11 :: source for purchase of ‘12’ gold bars found during the course of search,

and also admitted that it is undisclosed income. During the course of

assessement proceedings, the assessee came out with new explanation

and claimed that ‘12’ gold bars found during the course of search was

purchased in three Financial Years and the same has been recorded in the

books of accounts maintained by the assessee. However, the assessee

has not furnished any bills for purchase of gold bars in three Financial

Years and also failed to explain the source by filing relevant details. In

absence of any explanation with regard to source of income for purchase

of gold bars and also necessary evidence of bills for purchase of gold

bars, in our considered view, the arguments of the assessee that ‘12’ gold

bars were purchased during earlier financial year can’t be accepted. The

Ld.CIT(A) after considering relevant facts has rightly upheld the additions

made by the AO. Thus, we are inclined to uphold the findings of the

Ld.CIT(A) and sustain the addition towards value of ‘12’ gold bars of

Rs.39,84,000/-.

Order pronounced on the 19th day of June, 2026, in Hyderabad.

Sd/- Sd/- (िवजय पाल राव) (मंजूनाथा. जी) (VIJAY PAL RAO) (MANJUNATHA.G) उपा�� /VICE-PRESIDENT लेखा सद�/ACCOUNTANT MEMBER

Hyderabad, dated 19.06.2026. TLN

आदेशकी �ितिलिप अ�ेिषत/ Copy of the order forwarded to:

िनधा�रती/The 1 : Ashok Kumar Agarwal, SRT 256, H.No.7-2- 477, Industrial Housing Colony, Sanathnagar, Assessee Hyderabad-500 016. राज�/ The Revenue 2 : The ACIT, Central Circle-3(3), Hyderabad.

The Principal Commissioner of Income Tax, Hyderabad. 3 िवभागीय�ितिनिध, आयकर अपीलीय अिधकरण, हैदराबाद / DR, ITAT Hyderabad. 4 गाड�फ़ाईल / Guard file 5

आदेशानुसार / BY ORDER

TUMMALACHARLA Digitally signed by TUMMALACHARLA LAKSHMI NARAYANA DN: cn=TUMMALACHARLA LAKSHMI LAKSHMI NARAYANA, c=IN, o=INCOME TAX APPELLATE TRIBUNAL, ou=INCOME TAX NARAYANA APPELLATE TRIBUNAL, CHENNAI BENCH Date: 2026.06.19 11:29:02 +05'30'

Sr. Private Secretary ITAT, Hyderabad