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2019 (2) TMI 901 - AT - Income TaxCash and jewellery found at the time of search and seizure operation U/s 132 - cash found as unaccounted or unexplained or undisclosed - Held that - We find that the cash found at the time of search and seizure operation U/s 132 of IT Act from the premises of the Assessee was less than the cash in hand as per books of account. We further find that the jewellery found from the Assessee s premises was less than jewellery valued as per Wealth Tax Records of various persons. Impugned Order of the CIT(A) wherein he deleted the aforesaid additions of ₹ 9,75,000/- and ₹ 1,09,72,957/-, needs no interference. The cash found, amounting to ₹ 9,75,000/-, being less than cash balance as per books of account; is fully explained by cash balance as per books of account. The AO erred in making addition of the aforesaid amount without any reasoning and in the absence of any evidence to show that the cash found was unaccounted or unexplained or undisclosed. Similarly, the jewellery found from the premises of the Assessee is also fully explained by Wealth Tax Records of various persons. The AO erred in making the addition of the aforesaid amount without proper reasoning, and in the absence of any evidence to show that the jewellery found was unaccounted or unexplained or undisclosed. AO had no basis to make the additions, when the cash found was explained by cash balance as per books of account and when the jewellery found was fully explained by jewellery disclosed in Wealth Tax Records of various persons. There is no material to warrant any interference by us with the impugned Order of the Ld. CIT(A). The order of the Ld. CIT(A) is sound in law. - Decided in favour of assessee
Issues:
1. Addition of cash found during search and seizure operations. 2. Addition of jewelry found during search and seizure operations. Analysis: Issue 1: Addition of cash found during search and seizure operations The Assessing Officer (AO) made an addition of ?9,75,000 on account of cash found during search and seizure operations at the Assessee's premises. The AO claimed that the cash was unexplained and undisclosed income. The Assessee, however, provided explanations supported by the books of account, showing that the cash found was less than the cash balance as per the books of account. The Ld. CIT(A) deleted this addition, stating that there was no evidence to suggest that the cash represented undisclosed income. The ITAT upheld the decision of the Ld. CIT(A), emphasizing that the cash found was explained by the cash balance in the books of account, and hence, the addition was unjustified. Issue 2: Addition of jewelry found during search and seizure operations Similarly, the AO made an addition of ?1,09,72,957 on account of jewelry found during the search and seizure operations. The Assessee provided explanations and documents showing that the jewelry found was duly disclosed in the Wealth Tax Records of the family members. The Ld. CIT(A) deleted this addition, highlighting that there was no basis to conclude that the jewelry found was undisclosed. The ITAT agreed with the Ld. CIT(A), stating that the jewelry was fully explained by the Wealth Tax Records, and hence, the addition made by the AO was erroneous. In the appeal filed by the Revenue before the ITAT, various judicial precedents were cited to support the additions made by the AO. However, the ITAT found that the facts of those cases were materially different from the present case. The ITAT noted that the explanations provided by the Assessee regarding the cash and jewelry found were satisfactory and supported by documentary evidence. Consequently, the ITAT upheld the decision of the Ld. CIT(A) to delete the additions of both the cash and jewelry amounts. The ITAT concluded that there was no basis for interference with the Ld. CIT(A)'s order and dismissed the appeal of the Revenue. In summary, the ITAT upheld the Ld. CIT(A)'s decision to delete the additions of cash and jewelry found during the search and seizure operations, as the Assessee had provided satisfactory explanations supported by relevant records, rendering the additions unjustified.
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