2023 (2) TMI 1161 - AT - Income Tax

Addition u/s 69A - unexplained money addition - eligible to be set off as well both against unaccounted cash as well as unaccounted jewellery - HELD THAT - DR could hardly dispute that the foregoing twin judicial precedents are already in assessee s support that such a set off could very well be granted even against jewellery items and vice-versa. This is further coupled with the clinching fact that seized material against the assessee found during the course of search on 04.11.2017. There is neither any amount mentioned therein nor the sum total thereof so as to draw any presumption of correctness of contents thereof u/s 292C of the Act. Assessee s search statement had admitted various amounts as per the contents of seized document - We find no merit in the Revenue s instant argument in light of CBDT s twin landmark circulars dated 10.03.2003 and 18.12.2004 that a searched party s admissions or confessions during search or survey hardly carry any significance in the absence of any supportive evidence. We reiterate that the foregoing sole seized document is totally dumb as there are no clear-cut entries which could suggest any payments or receipts, as the case may be involving this assessee - Decided in favour of assessee.

Summary

Issues:
1. Assessment year 2017-18 - Validity of assessment order due to lack of DIN & Order number.
2. Assessment year 2018-19 - Telescoping of unexplained money addition.

Assessment Year 2017-18:
The judgment pertains to the assessment year 2017-18 involving twin appeals by the assessee against the CIT(A)'s orders. The key issue revolves around the validity of the assessment order due to the absence of the "DIN & Order" details as mandated by CBDT circulars. The tribunal noted that the circulars explicitly state that any communication lacking such details is deemed invalid. The Revenue's argument, supported by subsequent intimation of the DIN & Order number, was dismissed. Citing a previous tribunal order, the assessment was quashed, emphasizing that the default in allotting the DIN & Order number could not be condoned. Consequently, the assessment and rectification were annulled, leading to the acceptance of the assessee's appeals.

Assessment Year 2018-19:
In the assessment year 2018-19, both the assessee and the Revenue filed appeals concerning the telescoping of an unexplained money addition. The primary issue for consideration was the set-off of Rs.1,66,40,000/- made by the Assessing Officer, partially allowed by the CIT(A). The assessee sought complete deletion of the addition and argued for set-off against unaccounted cash and jewellery to avoid double addition. The Revenue, however, supported the Assessing Officer's decision to disallow the set-off entirely. The tribunal carefully considered both arguments and noted judicial precedents supporting the set-off against jewellery items. Additionally, it highlighted the lack of clarity in the seized material and dismissed the Revenue's reliance on the assessee's search statement. Relying on CBDT circulars, the tribunal accepted the assessee's contentions, allowing the main appeal and dismissing the Revenue's cross appeal. As a result, the assessee's appeals were allowed, and the Revenue's cross appeal was rejected.

In conclusion, the judgment addressed the issues surrounding the validity of the assessment order for the assessment year 2017-18 and the telescoping of unexplained money addition for the assessment year 2018-19. The tribunal's decision in both instances favored the assessee, leading to the acceptance of the appeals and the dismissal of the Revenue's cross appeal.