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Income Tax Appellate Tribunal, JAIPUR BENCHES,”SMC” JAIPUR
Before: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 161/JP/2023
lquokbZ dh rkjh[k@ Date of Hearing : 27/04/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 10/05/2023 vkns'k@ ORDER PER: SANDEEP GOSAIN, J.M.
This appeal by the assessee is directed against the order dated 27.02.2023 of ld. CIT (A), Udaipur-2 passed under section 250 of the IT Act, 196 for the assessment year 2019-20. The assessee has raised the following grounds :-
The ld. CIT (A) has erred on facts and in law in confirming the addition of Rs. 7,43,800/- u/s 69A of the Act out of cash seized of Rs. 20,38,000/- u/s 132A of the Act by not allowing the credit of income declared by the assessee’s brother Sh. Tishan Jangam in the absence of evidence to prove that cash seized from the assessee belongs to some other person except the bald statement of assessee and not allowing the claim of opening balance as on 01.04.2017 of Rs. 2 lacs in the absence of evidence.
2. The appellant craves to alter, amend and modify any ground of appeal.
Necessary cost be awarded to the assessee.
The brief facts of the case are that the assessee is an Individual, engaged in the job work of stitching of laces in dupatta. He is not used to banking system and therefore mostly keeps the savings of the family in cash at the residence. He does not have any investment in any bank deposit or other investments. On the occasion of Deepawali when he was going to his in-laws house situated at Savalgarh by car along with his wife and children, he was intercepted by SST Prabhari team on 08.11.2018 at Atar Ghat Sabalgarh, Morena where cash of Rs.20,38,000/- was found. Thereafter summon u/s 131(1A) was issued by ITO-1, Morena on 08.11.2018 and his statements were recorded. In the statement (PB 19-25) he explained that this cash belongs to savings of himself, his wife and his brothers. The assessee filed the return for the year under consideration on 13.06.2019 declaring total income of Rs.6,69,520/- (PB 11-14). In course of assessment proceedings assessee filed detailed explanation as to the source of cash of Rs.20,38,000/- as reproduced at page 3-4 of assessment order. However, AO rejected the explanation of assessee by making following observations:-
(i) Assessee has not filed his ROI till the time of search and the explanation furnished by the assessee is an afterthought to provide the source of unaccounted cash seized.
(ii) Assessee has failed to produce any supporting evidences regarding the source of cash seized.
(iii) The assessee has not produced any documents to prove the fact that the receipts are from job work done by assessee. Further, the receipts shown by the assessee are gross receipts, which does not include expenses incurred by him. Thus even if receipts are considered to be genuine, profit/saving would have been much less.
(iv) Assessee has not shown his drawings and other household expenses. If these expenses are considered, the assessee’s receipts will be set off and he would be left with meagre savings.
(v) Assessee did not have any books of accounts to adjudge his cash balance.
Thus the said cash remained unexplained.
Accordingly, AO made addition of Rs.20,38,000/- u/s 69A to the total income and taxed the same as per provisions of section 115BBE of the Act.
3. Aggrieved by the order of AO, the assessee filed appeal before ld. CIT (A).
The ld. CIT (A) allowed partial relief to the assessee by holding in para 4.5 of his order that in the statement recorded u/s 131(1A), the appellant explained that the cash found represents the saving of the entire family comprising of his parents and brothers. The returns filed indicates that tax has been deducted at source u/s 194C which establishes that they are having income from the Job work. Assessee has declared income of Rs.6,92,640/- in AY 2018-19 and Rs.6,69,520/- in AY 2019-20 which is accepted by AO. The appellant also claimed that his brother Tiksham declared income of Rs.7,00,000/- in AY 2018-19 and Rs.6,08,590/- in AY 2019-20.
However, no credit of income declared by his brother can be given to the appellant as no evidence furnished to prove that the cash seized from the appellant belongs to some other person except the bald statement. In appeal proceeding, the Ld. AR, on the basis of the income declared and bank statement, filed the day to day cash flow statement of appellant. As per the cash flow statement cash position as on the date of seizer of the cash works out to Rs.14,94,200/-. Out of this Rs.2,00,000/- represents opening balance as on 01/04/2017 for which no evidence filed. If the same is excluded the correct position of the cash in the hands of the assessee works out to Rs.12,94,200/-. Considering the same, the Ld. CIT (A) accepted the availability of cash to the extent of Rs.12,94,200/- and thus confirmed the balance addition of Rs.7,43,800/-.
Now the assessee is in appeal before us.
Before us, the ld. A/R of the assessee submitted that after the order of Ld. CIT(A), the only issue left for consideration is whether opening cash balance as on 01.04.2017 should be allowed or not and whether the savings of assessee’s brother Shri Tikshan be allowed or not in explaining the cash found from the assessee. The ld. A/R further submitted that assessee has filed the return for AY 2018-19 on 29.03.2019 (PB 15-18), i.e. after cash was found from him. In this return assessee declared gross total income of Rs.7,01,159/-. Therefore, the opening cash balance of Rs.2 lacs as on 01.04.2017 is not unreasonable considering the living standard of assessee as explained in affidavit dated 12.04.2021 (PB 26-29). Further once the Ld. CIT(A) has accepted the availability of cash on the basis of such cash flow statement (PB 6-7) at Rs.12,94,200/-, there is no reason to disbelieve the opening cash balance of Rs.2 lacs on 01.04.2017. Hence, AO be directed to accept the opening cash balance of Rs.2 lacs and accordingly delete the addition to this extent out of the addition confirmed by Ld. CIT(A). The ld. A/R submitted that the Ld. CIT(A) has not allowed the cash available with assessee’s brother Shri Tikshan Jangam of Rs.9,20,750/- (PB 8-9) for the reason that no evidence was furnished to prove that the cash seized from the appellant belongs to some other person except the bald statement. This is factually incorrect. In fact Shri Tikshan Jangam has declared income of Rs.7 lacs in AY 2018-19 (PB 30-33) and Rs.6,08,590/- in AY 2019-20 (PB 34-36). The fact that Shri Tikshan Jangam residing with the assessee is evident from Question No.14 of the statement of assessee (PB 22). Further in affidavit dated 12.04.2021 (PB 26-29) the assessee has explained in detail that cash found from him belongs to himself and of his brothers. This affidavit is not controverted. Hon’ble Supreme Court in case of Mehta Parikh & Co. Vs. CIT 30 ITR 181 at Pg 187 has held that the rejection of affidavit filed by the assessee is not justified unless the deponent has either been discredited in cross examination or has failed to produce other supporting evidence when called upon to do so. This is also reiterated by Hon’ble ITAT, Jaipur Bench in case of Kuldeep Chand Garg Vs. ITO 37 Tax World 127 where it was held that contents of duly sworn and affirmed affidavit are to be accepted as such unless the deponents are examined to established otherwise. These are sufficient evidence to established that cash of Tikshan Jangam was also lying with the assessee which is part of cash found of Rs.20,38,000/-. The ld. A/R thus submitted that in view of the above, the addition made by AO and sustained by ld. CIT (A) of Rs.5,43,800/- be directed to be deleted.
On the other hand, the ld. D/R supported the orders of the revenue authorities.
We have heard rival submissions, perused the material on record and gone through the orders of the revenue authorities. From the facts, we have noticed that the assessee filed return of income for the year under consideration on 13.06.2019 declaring total income of Rs. 6,69,520/-. In the course of assessment proceedings, assessee filed his explanation as to the source of cash of Rs. 20,38,000/- as reproduced at pages 3-4 of the assessment order. However, AO rejected the explanation of the assessee and consequently made addition of Rs. 20,38,000/- under section 69A of the IT Act, to the total income of the assessee and taxed the same as per provisions of section 115BBE of the IT Act. On appeal, the ld. CIT (A) after considering the submissions of both the parties accepted the availability of cash to the extent of Rs. 12,94,200/- and thus confirmed the balance addition of Rs. 7,43,800/- and consequently partly allowed the appeal.
7.1. Now on perusal of the records, we find that after the order of ld. CIT (A), the only question left for consideration is as to whether the opening cash balance as on 01.04.2017 should be allowed or not and whether savings of assessee’s brother Shri Tikshan be allowed or not in explaining the cash found from the assessee. In this regard, our attention was drawn by the assessee to the return of income for the assessment year 2018-19 which was filed on 29.03.2019 which is at paper book pages 15-18. In this return, assessee has declared his gross total income of Rs. 7,01,159/-. Therefore, in this way the opening cash balance of Rs. 2 lacs as on 01.04.2017 is not unreasonable considering the living standard of the assessee as explained in affidavit dated 12.04.2021 which is at paper book pages 26-29. We are also of the view that once the ld. CIT (A) has accepted the availability of cash on the basis of such cash flow statement at Rs. 12,94,200/- which is at paper book pages 6-7, therefore, there is no reason to disbelieve the opening cash balance of Rs. 2 lacs as on 01.04.2017. Therefore, taking into consideration the above discussion, we direct the AO to accept the opening cash balance of Rs. 2 lacs and accordingly delete the addition to this extent out of the addition confirmed by the ld. CIT (A).
7.2. Now coming to the another aspect of the case, wherein the ld. CIT (A) has not allowed the cash available with the assessee’s brother Shri Tikshan of Rs. 9,20,750/- for the reason that no evidence is furnished to prove that the cash seized from the assessee actually belongs to some other person, except the bald statement. In this regard, we find that the findings of ld. CIT (A) are factually incorrect as in fact the brother of the assessee i.e. Shri Tikshan has already declared his income of Rs. 7 lacs in assessment year 2018-19 which is at paper book pages 30-33 and Rs. 6,08,590/- in assessment year 2019-20 which are at paper book pages 34-36. Therefore, now the fact of Shri Tikshan Jangam residing with the assessee is concerned, the same is evident from question no. 14 of the statement of the assessee which was recorded initially is at paper book page 22. Apart from this, assessee has also filed his affidavit supporting his statement which is dated 12.04.2021 which is at paper book pages 26-29 wherein the assessee has elaborately explained in detail the cash found from him belongs to himself and his brother. The said affidavit although filed before the revenue authorities, was not controverted, therefore, in this regard we draw strength from the decision of Hon’ble Supreme Court in the case of Mehta Parikh & co. vs. CIT, 30 ITR 181 at page 187 wherein the Hon’ble Supreme Court has held that the rejection of affidavit filed by 8 Shri Mukesh Kumar Jangam, Jaipur. the assessee is not justified unless the deponent has either been discredited in cross examination or has failed to produce other supporting evidence when called upon to do so. This proposition was also reiterated and followed by the Coordinate Bench of the ITAT Jaipur Bench in the case of Kuldeep Chand Garg vs. ITO, 37 Tax World 127 wherein it was held that contents of duly sworn and affirmed affidavit are to be accepted as such unless the deponents are examined to established otherwise. Therefore, considering the above judgments as discussed by us, we are of the view that the documents placed on record along with affidavit by the assessee are sufficient evidence to establish that cash of Shri Tikshan was also lying with the assessee, which is part of cash found from the possession of the assessee of Rs. 20,38,000/-. We, therefore, direct the AO to delete the balance addition of Rs. 5,43,800/-.
In the result, this appeal of the assessee is allowed.
Order pronounced in the open court on 10/05/2023.
Sd/- Sd/- ¼lanhi xkslkbZ½ ¼ jkBkSM+ deys'k t;arHkkbZ ½ (RATHOD KAMLESH JAYANTBHAI) (SANDEEP GOSAIN) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 10/05/2023. Das/ आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Mukesh Kumar Jangam, Jaipur. 2. izR;FkhZ@ The Respondent- The DCIT, Central Circle-4, Jaipur.