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2016 (7) TMI 134 - AT - Income TaxAddition on account of undisclosed income - introduction of unaccounted money in the guise of loan or gift or capital gain - disclosure made by the assessee s husband - Held that - We find that the entire addition of ₹ 1 crore made by the Learned AO was merely based on the disclosure made by the assessee s husband while making total disclosure of ₹ 7.5 crores for the total group as a whole and the assessee s name has been included in the figure of ₹ 1 crore only in order to make the total disclosure to ₹ 7.5 crores. We find that no incriminating materials whatsoever was found during the course of search representing undisclosed income or undisclosed assets belonging to the assessee justifying the disclosure made in the sum of ₹ 1 crore. Under these circumstances, it is right on the part of the assessee to have retracted from the earlier disclosure while filing her return of income for the Asst Year 2010-11. Thus we hold that the Learned CIT-A had rightly deleted the addition made in the sum of ₹ 1 crore. Cash deposit in the bank account - Held that - We find that the assessee had claimed that no such cash deposits to that extent was made in her bank accounts. We also find that this claim of the assessee was never verified by the Learned AO for want of time which is not disputed by the revenue before us. We find that the Learned AR had fairly agreed for setting aside of this issue to the file of the Learned AO to enable him to make a detailed verification of this factual aspect for which the Learned DR before us agreed for the same. We direct accordingly.
Issues Involved:
1. Deletion of addition of ?1 crore as undisclosed income. 2. Sustaining addition of ?51 lakhs towards alleged cash deposit in the bank account. Detailed Analysis of the Judgment: Issue 1: Deletion of Addition of ?1 Crore as Undisclosed Income Background: A search and seizure operation was conducted under Section 132(1) of the Income Tax Act, 1961, on the Utsav group, including the assessee. A disclosure petition admitted undisclosed income of ?7.5 crores, with ?1 crore attributed to the assessee. However, the assessee did not include this ?1 crore in her return, claiming the disclosure was made under coercion and was not based on any incriminating material found during the search. Contentions: - Assessee: The disclosure was made under coercion, and no incriminating material was found during the search to justify the ?1 crore as undisclosed income. - Assessing Officer (AO): The disclosure was voluntary, and the argument of coercion was an afterthought. The AO also noted undisclosed cash deposits and unaccounted money introduced as loans or gifts in the assessee group. CIT(A) Findings: - The AO did not present any material proving that the disclosure by Sri Sambhunath Agrawal was legally binding on the assessee. - No incriminating material was found during the search to support the ?1 crore disclosure. - The CBDT Circular dated 10.3.2003 mandates reliance on credible evidence for framing assessments. - Specific issues like cash deposits or unaccounted money should be considered separately and not be the basis for an ad hoc addition of ?1 crore. Tribunal's Decision: - The Tribunal upheld the CIT(A)'s decision, noting that no incriminating materials were found to justify the ?1 crore as undisclosed income. - The Tribunal referenced several judicial precedents, including Pullangode Rubber Produce Co. vs State of Kerala, CIT vs Ravindar Kumar Jain, and Kailashben Manoharlal Chokshi vs CIT, emphasizing that admissions made under coercion or without corroborative evidence cannot be the sole basis for additions. Issue 2: Sustaining Addition of ?51 Lakhs Towards Alleged Cash Deposit in the Bank Account Background: The AO noted a cash deposit of ?51 lakhs in the assessee's bank account based on ITS data. The assessee contended that only ?6.50 lakhs was deposited, which was duly recorded in the books. Contentions: - Assessee: The ITS data showing ?51 lakhs was incorrect, and only ?6.50 lakhs was deposited, which was already disclosed. - CIT(A): No separate ground was raised by the assessee contesting the ?51 lakhs addition. The AO had no time to verify the assessee's contention. Tribunal's Decision: - The Tribunal noted that the AO did not verify the assessee's claim due to time constraints. - The Tribunal directed the AO to verify the factual aspect of the cash deposit claim, agreeing with the assessee's request for a detailed verification. Conclusion: - The Tribunal upheld the deletion of the ?1 crore addition, agreeing with the CIT(A) that it was not supported by any incriminating material. - The Tribunal remanded the issue of the ?51 lakhs cash deposit back to the AO for detailed verification, allowing both the revenue's appeal and the assessee's cross-objection for statistical purposes.
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