2018 (9) TMI 619 - AT - Income Tax

Addition on account of unexplained investment in gold coins - Held that - Assessee did not argue this ground of appeal. In the absence of any explanation or arguments from the side of the assessee no interference is required in the matter. However it may be noted that the issue pertains to recovery of unaccounted 13 gold coins found during the course of search for which no explanation was made before the authorities below. Whatever explanation was given either for declaring the jewellery in wealth tax return or jewellery possessed by family members was irrelevant to the matter in issue - decided against assessee Addition on account of unexplained cash - Held that - The assessee could not produce any credible evidence in respect of source of the cash found during the course of search. The assessee explained that cash is available to him out of withdrawals made earlier which was kept for any contingency. However such explanation was not supported by any cogent evidence. The assessee also tried to explain that cash was declared in the wealth tax return. However in assessment year under appeal assessee has declared cash of 75, 612/- in wealth tax returns therefore there were no evidence filed by assessee to explain availability of the cash with him and the source thereof. The authorities below were therefore justified in considering it to be unexplained cash found during the course of search - decided against assessee Cash received as advance for sale of property - income from undisclosed sources - Search proceedings - Held that - In the present case huge unaccounted cash was found and seized during the course of search from assessee which is not disputed by the assessee. Whatever explanation was given by the assessee later on was not supported through any evidence or material on record. Therefore the authorities below have correctly considered it to be unexplained cash found during the course of search and rightly treated as income of assessee from undisclosed sources. The addition of 2 lakhs on account of cash found is independent to this issue. Therefore no telescoping benefit can be given. No interference is called for in the matter. Appeal of the assessee is accordingly dismissed

Summary

Issues Involved:
1. Addition of ?2,14,120/- on account of unexplained investment in gold coins.
2. Addition of ?2,00,000/- on account of unexplained cash.
3. Addition of ?50,00,000/- on account of cash found during search and seizure operations.

Issue-wise Detailed Analysis:

1. Addition of ?2,14,120/- on account of unexplained investment in gold coins:
The assessee challenged the addition of ?2,14,120/- made by the A.O. under section 69A of the I.T. Act for unexplained investment in gold coins found during a search and seizure operation. The gold coins were found in Locker No. 293 at HDFC Bank, Noida. The assessee failed to provide a satisfactory explanation for the source of acquisition of these gold coins. The A.O. noted that the assessee could not explain the source of the gold coins during the statement recorded under section 132(4) of the I.T. Act. The Ld. CIT(A) confirmed the addition, noting that the issue was specifically about gold coins, not other jewelry, and the gold coins were not declared in the wealth tax return. During the appellate hearing, the assessee did not argue this ground, leading to the dismissal of this ground of appeal.

2. Addition of ?2,00,000/- on account of unexplained cash:
The assessee contested the addition of ?2,00,000/- made by the A.O. under section 69A of the I.T. Act for unexplained cash found during the search and seizure proceedings. The total cash found was ?2,75,000/- at the residence and ?50,000/- in Locker No. 293. The A.O. did not accept the assessee's explanation that the cash was from regular withdrawals and savings, as no credible evidence was provided. The A.O. gave the benefit of ?1,25,000/- considering withdrawals made by the assessee, treating the remaining ?2,00,000/- as unexplained. The Ld. CIT(A) upheld this addition, noting that the cash declared in wealth tax returns for A.Ys. 2010-2011 and 2011-2012 was insufficient to cover the cash found. The appellate tribunal found no merit in the assessee's argument, noting the absence of credible evidence to explain the source of the cash and dismissed this ground of appeal.

3. Addition of ?50,00,000/- on account of cash found during search and seizure operations:
The assessee challenged the addition of ?50,00,000/- made by the A.O. for cash found at the business premises during the search. The assessee claimed this amount was an advance for the sale of property belonging to M/s. AOP Pvt. Ltd., received from farmers Om Prakash and Umad Singh, but failed to produce these individuals for verification. The assessee offered the amount for taxation to avoid litigation, subject to no penal action. The Ld. CIT(A) confirmed the addition, noting the assessee's inability to prove the identity and creditworthiness of the individuals and the inconsistencies in the affidavits and seized documents. The appellate tribunal found the explanation of the assessee to be an afterthought, unsupported by evidence, and upheld the addition, dismissing the ground of appeal. The tribunal also denied the telescoping benefit for the addition of ?2,00,000/- against this amount.

Conclusion:
The appeal of the assessee was dismissed in its entirety, with all grounds of appeal being rejected due to lack of credible evidence and satisfactory explanations for the unexplained investments and cash found during the search and seizure operations. The tribunal upheld the additions made by the A.O. and confirmed by the Ld. CIT(A).