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Facts
The assessee, Shabana Aqil Munir, appealed against the CIT(A)'s order sustaining an addition of Rs. 10 lakhs as unexplained cash under Section 68 of the IT Act for AY 2017-18. The initial addition of Rs. 1.25 crores by the AO stemmed from a search operation where the assessee claimed the money was a gift from her father-in-law, which her brother later contradicted. The CIT(A) restricted the addition to Rs. 10 lakhs, finding no other evidence apart from statements.
Held
The Tribunal sustained the CIT(A)'s decision, finding inconsistencies in the assessee's justification for the cash. It noted the assessee's history of not filing returns in previous years and the lack of substance in her claims, concluding that the father-in-law did not have sufficient cash balance to gift the disputed Rs. 10 lakhs. Thus, the Tribunal found no reason to interfere with the CIT(A)'s conclusion.
Key Issues
Whether the addition of Rs. 10 lakhs as unexplained cash under Section 68 of the Income Tax Act was justified, given the inconsistencies in the assessee's explanation of its source and the lack of evidence provided.
Sections Cited
143(3), 142(1), 68, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: SH. G.S. PANNU & SH. ANUBHAV SHARMA
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SH. G.S. PANNU, VICE PRESIDENT AND SH. ANUBHAV SHARMA, JUDICIAL MEMBER Assessment Year: 2017-18 Shabana Aqil Munir Vs. ACIT M-102, Greater Kailash-2, Central Circle – 15 New Delhi New Delhi PAN NO.AAHPA1604P (APPELLANT) (RESPONDENT) Appellant by Sh. Sunil Kapoor, Advocate Respondent by Sh. Dharm Veer Singh, CIT DR Date of hearing: 12/06/2024 Date of Pronouncement: 27/06/2024 ORDER PER ANUBHAV SHARMA, JM:
The assessee has filed the present appeal against the order dated 23.09.2022 passed by Commissioner of Income Tax (Appeals)- 28, New Delhi (here in after referred as ‘CIT(A)”) arising out of order of Assessment Order passed by ACIT, Central Circle-15, New Delhi order dated 28.12.2018 under Section 143(3) of the IT Act.
The assessee is an individual and derives income from business, rental and Income from other sources. She did not file the return of income. A search and seizure operation was conducted on M/s. Shabana Group of cases and notice u/s. 142(1) of the Act was issued which was responded by filing return declaring of income of Rs.15,20,400/-. The AO examined assessee and recorded statement if any cash and jewellery was kept by assessee at any other premises for which she stated that Rs.1,25,00,000/- was given to her by her father in law Sheikh Mohd. Arif, and her brother Kamal Akhtar was handed this money, for herself and her sons. She stated this money is with her brother. However, when Kamal Akhtar was confronted. He stated that the father in law of assessee had not given any amount to him and that Shabana had placed a bag with cash at his house out of trust which she had taken away 3-4 days back. Subsequently assessee retracted this statement and stated that when her husband was alive her father in law had told her that he will given her Rs.1.25 crores for herself and her children. Out of which he had given Rs.34 lacs only few months back before the death of her husband and her father in law had stated that remaining Rs.91 lacs will be handed over to her brother which she may take whenever required and she has not received Rs. 1.25 crores from her father in law.
2.1 The AO was not satisfied with the submissions and accordingly made the addition of Rs.1.25 crores u/s. 68 of the Act which was restricted to Rs.10 lacs by the CIT(A) on the basis that apart from statements there was no other evidences with the AO. The CIT(A) was of the view that assessee had merely accepted having Rs. 34 lacs which were kept with her brother out of which Rs.24 lacs have been surrendered by her in the return of income which has been accepted. So remaining Ten lacks needs to be sustained.
The assessee has challenged the order of CIT(A) and raised the following grounds of appeal :-
“1. That the Ld. AO is unjustified in making an addition of Rs.1,25,00,000/- on account of unexplained cash u/s.68 read with section 115BBE of the Income Tax Act, 1961.”
On hearing both the sides, it comes up that the Ld. AR merely relies the statement of the father in law and the fact that father in law had surrendered Rs.1.25 crores under the Pradhan Mantri Garib Kalyan Yojna (PMGKY), which was announced by the government, post demonetisation, for people holding black money to come clean by paying 49.9 per cent tax and penalty on the undisclosed income. However, the Ld. AR was not able to convince as to how the surrender made by the father in law is relevant to the addition of Rs.10 lacs sustained by the CIT(A). Thus amount now disputed is only Rs. 10 lacs for which the CIT(A) has even examined the cash flow statement of father in law to conclude that father in law was not having sufficient cash balance to gift Rs.10 lacs to the assessee.
As we go across the statements reproduced in the impugned orders, we sustain the findings of CIT(A) that three has been inconsistency in the claim of assessee to justify the cash admittedly held by her. In any case if the money was not received from father in law and assessee had generated it by selling mould machines under GPA of father in law, then should have been reported in the return. We are of the considered opinion that as assessee was not filing the returns in previous years, such bald claims could not have been accepted by the CIT(A). The conclusion drawn by the CIT(A) requires no interference. The grounds raised in appeal have no substance and the appeal of assessee is dismissed.
Order pronounced in the open court on 27.06.2024.