2013 (5) TMI 850 - AT - Income Tax

Summary

Issues Involved:
1. Addition of unexplained cash u/s 69A.
2. Addition of unexplained expenditure u/s 69C.

Summary:

1. Addition of Unexplained Cash u/s 69A:
The assessee, engaged in construction, was subjected to a search and seizure action u/s 132(1) on 9th July 2008, where cash worth Rs. 46,09,800 was found, out of which Rs. 35 lakhs was seized. The Assessing Officer (AO) concluded that Rs. 35,11,878 was unexplained and added this amount u/s 69A. The assessee contended before the Learned Commissioner (Appeals) that Rs. 10 lakhs was received from its Solapur Branch and that Rs. 79,08,150 taxed in the previous year should be considered available cash, thus avoiding double taxation. The Learned Commissioner (Appeals) only allowed Rs. 10 lakhs from Solapur, confirming an addition of Rs. 25,11,878. The Tribunal held that the addition of Rs. 25,11,878 should be telescoped with the earlier addition of Rs. 70,12,150 confirmed in the previous year, granting relief to the assessee.

2. Addition of Unexplained Expenditure u/s 69C:
During the search, a diary showing unaccounted expenditures totaling Rs. 15,99,000 was found. The AO added this amount as undisclosed income. The assessee argued before the Learned Commissioner (Appeals) that this amount was already taxed in the previous year, but the Commissioner dismissed the grounds as "not pressed." The Tribunal noted the lack of clarity on whether this amount was already taxed in the previous year and restored the issue to the file of the Learned Commissioner (Appeals) for fresh adjudication, allowing the ground partly for statistical purposes.

Conclusion:
The appeal was partly allowed for statistical purposes, with the Tribunal granting relief on the addition of unexplained cash and remanding the issue of unexplained expenditure for fresh consideration.