BALVANTBHAI GOPALBHAI PATEL,SABARKANTHA vs. THE ITO, WARD-1, HIMATNAGAR

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ITA 1523/AHD/2024Status: DisposedITAT Ahmedabad07 March 2025AY 2018-1925 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 1,00,000/- made by the Assessing Officer under Section 69A of the Income Tax Act, 1961, was not justified. The Tribunal noted that the assessee had provided an explanation that the cash represented savings from previous years. While the AO and CIT(A) were not satisfied, the Tribunal found that the explanation, coupled with the fact that the cash was found at the assessee's residence, warranted further consideration. The Tribunal observed that the onus was on the revenue to prove that the cash was undisclosed income. Since the Tribunal found that the explanation provided by the assessee was plausible and not dislodged by the revenue, it directed the deletion of the addition. The ratio of the decision is that if an assessee provides a reasonable explanation for unexplained cash found at his residence, and the revenue fails to disprove it, the addition cannot be sustained.

What were the facts?

The assessee, Shri Siddharth Nautiyal, is in appeal against the order of the Commissioner of Income Tax (Appeals), Ahmedabad, for the Assessment Year 2018-19. The dispute pertains to the addition of Rs. 1,00,000/- made by the Assessing Officer (AO) under Section 69A of the Income Tax Act, 1961, on account of unexplained cash found during a survey. The assessee had explained that this cash was part of his savings from previous years and was kept at his residence. The AO, however, was not satisfied with the explanation and made the addition. The CIT(A) upheld the AO's order.

What were the issues?

1. Whether the addition of Rs. 1,00,000/- on account of unexplained cash found during the survey, made by the Assessing Officer under Section 69A of the Income Tax Act, 1961, is justified, and if not, whether the same should be deleted. Assessee's Contention: The assessee argued that the cash of Rs. 1,00,000/- found during the survey represented his legitimate savings from prior years and was kept at his residence for personal use. He contended that the AO erred in making the addition without proper appreciation of the facts and evidence. Revenue's Contention: The revenue, through the Assessing Officer and upheld by the CIT(A), contended that the assessee failed to provide satisfactory evidence to explain the source of the cash found. Therefore, the addition under Section 69A was justified as the cash was deemed to be unexplained.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER \

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