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Nitin Amratlal Brahmbhatt, Mumbai vs ACIT | s.143(3), 69A | ITAT Mumbai 2024 | BharatTax

NITIN AMRATLAL BRAHMBHATT,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX ,CC2(1), MUMBAI

ITA 3228/MUM/2024Status: DisposedITAT Mumbai24 October 2024AY 2019-2010 pages

AI SummaryN/A

Facts

During a search action on 19/03/2019 at the Assessee's premises, cash of INR 16,06,420/- was found. The Assessee provided an explanation for INR 3,05,000/-, but the balance of INR 13,01,400/- was seized as unexplained. The Assessing Officer (AO) made an addition of INR 13,10,850/- under Section 69A of the Income Tax Act, 1961, which was subsequently upheld by the CIT(A).

Held

The Tribunal found that the Assessee had adequately explained the source of the seized cash, including an opening cash balance declared in the ITR and funds from M/s. Arcadia Shares and Stock Brokers Private Limited, supported by documentary evidence. The AO's observations were deemed unsupported by material on record. Therefore, the addition of INR 13,10,400/- under Section 69A was not sustainable, and the appeal was allowed.

Key Issues

Whether the addition of unexplained cash under Section 69A of the Income Tax Act, 1961, was justified, and if the Assessee had sufficiently explained the source of the seized cash.

Sections Cited

Section 143(3), Section 69A, Section 234A, Section 234B, Section 234C, Section 234D, Section 143(2), Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, B BENCH, MUMBAI

Per Rahul Chaudhary, Judicial Member:

1.

The present appeal preferred by the Assessee is directed against the order, dated 07/08/2023, passed by the Learned Commissioner of Income Tax (Appeals) - 48, Mumbai, (hereinafter referred to as 'the CIT(A)'] whereby the CIT(A) had dismissed the appeal preferred against the Assessment Order, dated 23/04/2021, passed under Section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as 'the Act'] for the Assessment Year 2019-2020. 2. The Appellant has raised following grounds of appeal :

"

1.

The Ld. Commissioner of Income Tax (Appeal) [hereinafter referred to as `Ld. CIT (A)'] erred in upholding the action of the Ld. A.O. in assessing the total income of the Assessee at Rs.51,88,850/- as against the returned income declared by the Assessee at Rs.38,78,450/- without appreciating the facts and circumstances of the case.

2.

The Ld. CIT(A) erred in confirming the action of the Ld. A.O, in making the addition of Rs.13,10,400/- under section 69A of the Act by treating the cash seized during the course of search action at the Assessee's premises without appreciating the fact the Assessee has duly established nature and source of the said cash. Hence, the addition made under section 69A of the Act is not justified and the same may be deleted.

3.

The Ld. CIT(A) failed to appreciate that the Assessee has furnished all the details and evidence to explain the source of the cash seized during the course of a search action and therefore, the same cannot be treated as unexplained Income. Thus, the addition of Rs.13,10,400/- made by the Ld. A.O. and confirmed by the Ld. CIT(A) is not at all justified and the same may be deleted.

4.

The Appellant denies the liability imposed on account of the interest under section 234A, 234B, 234C and 234D and the same maybe deleted.”

3.

The relevant facts in brief are that the Appellant filed return of income for the Assessment Year 2018-19 on 31/10/2019 declaring total income at INR 38,78,450/-. Some documents pertaining to the Appellant were found and seized during the course of search and seizure action carried out in the case of Shri Naresh Manakchand Jain on 19/03/2019. Further, during the course of search action, cash of INR 16,06,420/- was found at the premise of the Appellant. At the time of search the Appellant could only provide the source of cash aggregating to INR 3,05,000/-. According to the Appellant a sum of INR.2,00,000/- was sourced out of household savings while the sum of INR.1,05,000/- belonged to the mother of the Appellant. Since the Appellant was not unable to offer valid explanation regarding the balance cash of INR.13,01,400/-, the same was seized as unexplained cash. Subsequently, regular scrutiny assessment proceedings were initiated in the case of the Appellant for the Assessment Year 2019-2020 as notice under Section 143(2) and notice under Section 142(1) of the Act alongwith letter of requisition were issued by the Assessing Officer was served upon the Assessee. In response, the Assessee furnished various details and submissions. However, the Assessing Officer concluded that the Appellant had failed to explain the source of cash of INR.13,01,400/- seized during search proceedings. Thus, regular scrutiny assessment was completed under Section 143(3) of the Act in the case of the Appellant at the total income of INR.51,88,850/- after making an addition of INR 13,10,850/- as unexplained cash under Section 69A of the Act. Being aggrieved the Assessee carried the appeal before the CIT(A). Before the CIT(A) the Appellant made following submission [reproduced in paragraph 5 of the impugned order passed by the CIT(A)]: "Pursuant to search action in the case of Mr. Naresh Jain, the Appellant's residential premises were also searched (date of search 19/03/2019) and cash of Rs.16,06,420/- was found. It was explained that cash of Rs.2,00,000/- was out of household savings and Rs.1,05,000/- was belonging to his mother. The balance cash of Rs.13,10,400/- remained unexplained during the course of search and hence the same was seized.