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Income Tax Appellate Tribunal, “SMC” BENCH, PANAJI
Before: SHRI PARTHA SARATHI CHAUDHURY, JM
ORDER This appeal preferred by the assessee emanates from order of the ld. CIT(A) Belgavi dated 07-12-2018 for assessment year 2014-15 on the following grounds of appeal.
1. The order passed by the ld. CIT(A is bad in law, misconceived and is void ab- intio. The ld. CIT(A) has erred in sustaining the addition made by the AO of Rs. 30,0,000/- without considering the facts and the submission made by the appellant. The appellant is an individual regularly assessed to tax. The appellant was intercepted by the AIU team, New Delhi while travelling from Bangalore to New Delhi on 22-02- 2014 with cash of Rs. 30,00,000/-. The appellant was asked to explain the source of Rs. 30,00,000/- in his possession and support evidence for the same. The appellant claimed that the amount is on account of agricultural income and other source of income. It was not possible for the appellant to obtain any evidence for the same in short notice. Of the cash found Rs. 29,50,00/- was seized and Rs. 50,000/- was released to the appellant for personal expenses. Notice u/s 142(1) was served on the appellant on 29-10-2015 and 01-12-2015 calling for information. The return of income was filed by the assessee on 15-12-2015 declaring the total income of Rs. 7,98,980/-. Notice u/s 143(2) was issued on 14-01- 2016 and the appellant was asked to explain the source of Rs. 30,00,000/-, bank statements showing the withdrawals of Rs. 30,00,000/- as on 20-02-2014 was furnished during the assessment proceedings. But the department was not satisfied as to the genuineness of the claim. As such the department added Rs. 30,00,000/- as taxable income. Section 69A of the Act makes it clear that the addition can be made only when the assessee is found to be in the possession of money, bullion, jewellery, etc. not ITA 34/PAN/2019 Murgesh R. Nirani A.Y. 2014-15 recorded in his books of accounts. Since the money was recorded in the books of accounts of the appellant, the addition made by the AO is not according to the law. 2. The appellant craves leave to add, amend, alter, delete or withdraw any or all the grounds of appeal. “
2. The relevant facts in this case are that the assessee was intercepted by the Airport Intelligence Unit Team (AIU) of the Department at New Delhi Airport while travelling from Bangalore to New Delhi with cash of Rs. 30,00,000/- in his possession. At the time of interception a statement u/s 131(1A) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) was recorded on oath of the assessee. The relevant extracts of the reply given by the assessee in the said statement finds place in the assessment order. The assessee, however, could not give any satisfactory explanation with respect to cash of Rs. 30,00,000/- in his possession nor produce any evidence in support of the same. Thereafter, search was conducted on the person of the assessee on 22-12-2014 and statement u/s 132(4) of the Act was also recorded on oath. The relevant extract of the reply is also reproduced in the assessment order. That as per reply to question no. 7 of the statement recorded u/s 132(4) of the Act where the assessee was asked about the source of cash of Rs. 30,00,000/- available with him and evidences in support of the cash, he replied that this cash was generated by him during the current financial year through agricultural sale proceeds and the same would be declared in the return of income for A.Y. 2014-15.
That during the course of assessment proceedings, the assessee submitted a copy of statement of account No. 01 held by the assessee in M/s.Vijay Souhard Credit Sahakari Ltd., Mudhol, from where there is a cash withdrawal of Rs. 30,00,000/- on 20-02-2014 and the assessee substantiated same Rs. 30,00,000/- which he had carried to New Delhi was in his possession when he was intercepted by the AIU Team at New Delhi Airport. The ld. A.O observed that the assessee
ITA 34/PAN/2019 Murgesh R. Nirani A.Y. 2014-15 consistently in his statements recorded u/s 131(1A) and u/s 132(4) of the Act has stated that said cash of Rs. 30,00,000/- in his possession was out of the agricultural income and out of other source of income. If the cash was withdrawn from the account of the assessee in M/s. Vijay Souhard Credit Sahakari Ltd., Mudhol and it was the same cash in his possession at the time of interception by the AIU at New Delhi Airport, there was no reason for the assessee to state that the cash was out of agricultural income and out of other source of income when he could have merely stated that it was out of withdrawal made from the said account. The assessee could not resolve this contradiction in his statements during the assessment proceedings by providing any satisfactory explanation or furnishing evidences before the ld. A.O. Hence, the entire cash amount of Rs. 30,00,000/- was treated as undisclosed income of the assessee and added to his total income.
When the matter travelled upto the ld. CIT(A) as evident from para 6 of his order that the assessee even before him could not provide any reasonable explanation regarding the source of cash of Rs. 30,00,000/- found with the assessee during interception by the AIU Team at New Delhi Airport. Accordingly, the addition was confirmed.
At the time of hearing, the ld. A.R for the assessee submitted that they have given detailed submissions and explanations regarding source of cash before the ld. CIT(A) which, however, does not find place in his order. It was further submitted that the ld. CIT(A) ignored the entire submissions and dismissed the appeal of the assessee.
Per contra, the ld. D.R supported the orders of the revenue authorities and submitted that when there has not been any explanation given by the assessee as per the record then the addition made by the ld. A.O as undisclosed income of the assessee is justified in law.
ITA 34/PAN/2019 Murgesh R. Nirani A.Y. 2014-15
I have perused the relevant materials/documents on record and have heard the rival contentions, analyzed the facts and circumstances in this case. It is observed when, the assessee was intercepted by the AIU Team New Delhi and he was having cash of Rs. 30,00,000/- in his possession, thereafter statements were recorded of the assessee u/s 131(1A) of the Act and also another statement u/s 132(4) of the Act in pursuance to search conducted on the person of the assessee. That on perusal of the reply given by the assessee he has stated that some of the cash arises from withdrawal from different bank accounts maintained with the family members and some cash is generated from agricultural sale proceeds and this is evident in the reply given to question No. 9 of the statement u/s 131(1A) of the Act. Similarly in the reply to question No. 6 which is in pursuance to the search statement recorded u/s 132(4) of the Act, the assessee had replied that the said cash of Rs. 30,00,000/- in his possession was on account of agricultural income and other source of income. However, as examined by the ld. A.O during the assessment proceedings the assessee has given completely different statement whereby he has submitted that the said cash was out of withdrawal from his account in M/s. Vijay Souhard Credit Sahakari Ltd. Mudhol. If this statement made by the assessee is correct then the other statements made that the source of fund was from agricultural income etc. then obviously has to be incorrect. This inherent contradictions was not resolved by the assessee neither during the assessment proceedings nor at the first appellate stage. The assessee has not been able to explain the source of cash of Rs. 30,00,000/- in his possession by furnishing any documentary evidences. In such scenario I do not find any infirmity with the findings of the revenue authorities in adding the said amount as undisclosed income and adding it to the total income of the assessee. At the same time, the ld. A.R had submitted that they have given detailed written submissions before the ld. CIT(A) which he has not considered. Considering these submissions and in the ITA 34/PAN/2019 Murgesh R. Nirani A.Y. 2014-15 interest of justice, I set aside the order of the ld. CIT(A) and remand the matter back to his file for re-adjudication as per law considering the submissions/evidences as furnished before him by the assessee and at the same time I direct the assessee to be present before the ld. CIT(A) to represent his case on merits by furnishing requisite details/documents as and when called for by the ld. CIT(A). Grounds of appeal
are allowed for statistical purposes.
8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 02nd day of December 2022.