2018 (12) TMI 688 - AT - Income Tax

Assessment u/s 153A - proof of incriminating material was found during the course of search - addition under unexplained cash credit - Held that - DR could not controvert the submissions of the assessee that no incriminating documents was found. Moreover we find that the addition is sustained merely on the basis of presumptions. We therefore direct the AO to delete this addition. Follow KABUL CHAWLA case 2015 (9) TMI 80 - DELHI HIGH COURT Cash expenditure unexplained - Held that - Looking to the details of Assessment Year 2013-14 and 2014-15 wherein the assessee has spent ₹ 2,59,405/- and ₹ 1,95,700/- as cash expenditure for household needs along with incurring of household expenses by cheque at ₹ 33,866/- and ₹ 22,097/- , the additions sustained by Ld. CIT(A) is only to the extent of ₹ 24,000/- and ₹ 20,625/-. Looking to the regular earning source of the assessee and her husband, we find no justification in the finding of Ld.CIT(A) confirming the addition for ₹ 24,000/- and ₹ 20,625/- towards unexplained cash deposit. We therefore direct the Ld.A.O to delete the addition of ₹ 24,000/- and ₹ 20,625/- for the Assessment Year 2013-14 and 2014-15. Amount received from husband towards household expenses - Held that - No material on record in the form of balance sheet or capital account of the assessee s husband has been filed which could prove that Rajeev Mazumdar has given ₹ 3,60,000/- to his wife for household needs. This fact could be verified only from the capital account of Shri Rajeev Mazumdar for Assessment Year 2015-16 and for this we direct the Ld. A.O for carrying out the necessary verification by calling details from the assessee after providing sufficient opportunity and if it is found that Rajeev Mazumdar has shown cash withdrawal of ₹ 3,60,000/- for household needs from his capital account, then the cash flow statement given by the assessee should be accepted and the alleged addition to be deleted. Gold jewellery found in the lockers held by the assessee - Held that - We find that Ld.CIT(A) has only given relief for the gold jewellery but did not accept the fact that in the Indian customs and traditions at the time of marriage silver utensils are also given to the bride. It is quite possible that the word silver utensils were not included in the CBDT instructions because at that point of time silver utensils were not coming under the category of capital assets. In our considered view Ld. CIT(A) ought to have taken a liberal approach by giving the benefit to the assessee for the value of gold jewellery and value of silver utensils held by her, within the monetary limit of value as on the date of search of the gold jewellery ornaments and permitted to be held, as provided in the CBDT Instruction No.1916 dated 11.5.1994. We accordingly direct the Ld.A.O to delete the addition of ₹ 34,495/- made for Assessment Year 2015-16 for silver utensils found in the locker owned by the assessee.

Summary

Issues Involved:
1. Whether the additions made by the Learned Assessing Officer (Ld. A.O) for Assessment Year 2009-10 to 2012-13 were on the basis of incriminating documents/materials found during the course of search.
2. Whether the Ld. CIT(A) was justified in sustaining the addition made by Ld. A.O on account of the alleged unexplained cash deposit in the bank accounts for Assessment Year 2009-10 to 2015-16.
3. Whether the Ld. CIT(A) was justified in confirming the addition for unexplained silver utensils valuing at ? 34,495/- found during the course of search for the Assessment Year 2015-16.

Detailed Analysis:

1. Additions Based on Incriminating Documents/Materials:
The first issue concerns whether the additions made by the Ld. A.O for Assessment Year 2009-10 to 2012-13 were based on incriminating documents/materials found during the search. The Tribunal noted that the search conducted on 12.08.2014 at the residential premises and lockers owned by the assessee did not yield any incriminating documents except for some gold and silver jewelry. The assessments for these years were completed before the search, and no incriminating material was found during the search that could justify the additions. The Tribunal relied on precedents such as CIT Vs. Kabul Chawla and All Global Cargo Logistic Ltd Vs DCIT, which held that no additions could be made if no incriminating material was found during the search. Consequently, the Tribunal ordered the deletion of the additions made for unexplained cash deposits for these years.

2. Unexplained Cash Deposits:
The second issue pertains to the addition of unexplained cash deposits in the bank accounts for Assessment Year 2013-14, 2014-15, and 2015-16. The assessee provided a detailed cash flow chart showing cash received from her husband for household expenses, which was verified by the Ld. A.O. The Tribunal found the cash flow chart credible and noted that the assessee had regular income from salary and cash withdrawals from the bank for household expenses. The Tribunal directed the Ld. A.O to delete the additions for Assessment Year 2013-14 and 2014-15, as the amounts were justifiable given the regular income and cash flow. However, for Assessment Year 2015-16, the Tribunal found that the cash received from the husband had doubled without sufficient evidence. The Tribunal directed the Ld. A.O to verify this claim by examining the capital account of the assessee’s husband and, if verified, to delete the addition of ? 2,07,850/-.

3. Unexplained Silver Utensils:
The third issue involved the addition of ? 34,495/- for unexplained silver utensils found during the search for Assessment Year 2015-16. The Ld. CIT(A) had allowed the claim for gold jewelry but not for silver utensils. The Tribunal noted that in Indian customs, silver utensils are often given at the time of marriage and should be considered similarly to gold jewelry. The Tribunal directed the Ld. A.O to delete the addition for the silver utensils, considering the cultural context and the monetary limit provided by CBDT Instruction No.1916.

Conclusion:
The Tribunal allowed the appeals for Assessment Year 2009-10 to 2014-15 and partially allowed the appeal for Assessment Year 2015-16 for statistical purposes. The order was pronounced in the open court on 10.12.2018.