Loading judgment…
Facts
During a search, cash of Rs. 26,49,750/- was found at the assessee's residence. The AO made additions of Rs. 25,00,000/- as unexplained money u/s 69A and Rs. 17,49,325/- as unexplained investment u/s 69, totaling Rs. 42,49,325/-. The CIT(A) partly allowed the appeal, confirming an addition of Rs. 3,21,188/-.
Held
The Tribunal noted that the assessee claimed Rs. 5 lakhs was cash withdrawn by his wife. However, the wife's bank statement was not produced. The Tribunal decided to remit the issue to the AO to decide afresh after providing the assessee with an opportunity to produce necessary evidence.
Key Issues
Whether the addition of Rs. 5 lakhs, claimed as cash withdrawn by the assessee's wife, can be confirmed without proper documentary evidence from the wife's end.
Sections Cited
250, 1961, 139(1), 132, 143(2), 142(1), 69A, 69, 153D, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of the ld. CIT(A)-11, Bangalore dated 28.1.2025 vide DIN No. ITBA/APL/M/250/2024-25/1072606609(1) passed u/s 250 of the Income Tax Act, 1961 (in short “The Act”) for the assessment year 2020-21.
The assessee has raised the following grounds of Appeal:
Brief facts of the case are that the assessee, being a partner of the firm, namely “M/s. Lotus Farms”, filed his return of income u/s 139(1) of the Act for the AY 2020-21 on 20.1.2021, declaring a total income of Rs.3,21,89,840/-. Thereafter, a search u/s 132 of the Act was conducted in the case of M/s. Lotus Farms and at the assessee's residence. During the course of search proceedings, cash to the tune of Rs.26,49,750/- was found from the residence of the assessee (partner of M/s. Lotus Farms), and out of the total cash found of Rs.26,49,750/-, the cash of Rs . 25 lakhs was seized as per the cash inventory marked as Annexure-C-LH2/132 in the absence of documentary evidences. Thereafter, a notice u/s 143(2) as well as 142(1) of the Act was issued, and in response, the assessee furnished the details as called for from time to time. Thereafter, the AO completed the assessment by making the following additions: a) Unexplained money u/s 69A of the Act – Rs.25,00,000/- b) Unexplained investment u/s 69 of the Act -Rs.17,49,325/- Total: -Rs.42,49,325/- Damodar Reddy Marupuru, Bangalore Page 3 of 5 3.1 Thus, the AO completed the assessment u/s 143(3) r.w.s. 153D of the Act, vide order dated 30.3.2022 on a total assessed income of Rs.3,64,39,165/-.
Aggrieved by the order of the ld. AO passed u/s 143(3) r.w.s. 153D of the Act, the assessee preferred an appeal before the ld. CIT(A).
The ld. CIT(A) partly allowed the appeal of the assessee. However, the contention of the assessee that cash of Rs . 5,00,000/- which was his wife’s withdrawal from her Yes Bank account, and available with the assessee, was not accepted by the ld. CIT(A) and accordingly, the addition of Rs.3,21,188/- (Rs.25,00,000/- - Rs.21,78,812/-) was confirmed.
Again aggrieved by the order of the ld. CIT(A), the assessee has filed the present appeal before this Tribunal.
Before us, ld. A.R. of the assessee vehemently submitted that the ld. CIT(A) erred in not accepting the cash of Rs.5 lakhs received from the spouse of the assessee, especially when the spouse is a registered taxpayer and had been compliant with her tax obligations in accordance with the applicable tax laws. Further, the ld. A.R. of the assessee submitted that the assessee’s wife had declared her income and discharged her tax liability. The ld. CIT(A) has confirmed the addition despite the fact that the assessee had furnished comprehensive evidence.
The ld. D.R., on the other hand, supported the order of the authorities below.
Damodar Reddy Marupuru, Bangalore Page 4 of 5 9. We have heard the rival submissions and perused the materials available on record. The only dispute raised by the assessee before us is with regard to explanation of the assessee that cash of Rs.5 lakhs which were his wife’s withdrawal from her Yes Bank account, was available with him. On going through the order of ld. CIT(A), we take note of the fact that the ld. CIT(A) had categorically observed that the bank account statement of assessee’s wife was not produced as evidence and accordingly, the availability of cash to the extent of Rs.21,78,812/- out of the total cash seized of Rs.25 lakhs was allowed and the addition of the balance amount of Rs.3,21,188/- was confirmed by the ld. CIT(A). On going through the order of ld. AO, we also take note of the fact that during the course of assessment proceedings, the assessee had not furnished any necessary documentary evidences like bank account statement, date, purpose of amount of cash withdrawal. This being so, in the interest of justice and fair play, we deem it fit and proper to remit this limited issue to the file of AO to decide afresh in accordance with law. Needless to say, a reasonable opportunity of being heard must be granted to the assessee and the assessee is also directed to produce the bank statements, IT returns, confirmations, and creditworthiness of the spouse of the assessee to establish the genuineness of the availability of cash to the tune of Rs.5 lakhs. It is ordered accordingly.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 6th Oct, 2025