2019 (11) TMI 503 - AT - Income Tax

Unexplained cash from during the course of search - HELD THAT - As decided in the case of Smt. Sarita Gupta Group 2019 (8) TMI 1426 - ITAT AHMEDABAD , there is no dispute with regard to the fact that assessee was found possessing unaccounted cash in physical form as well as deposited in the books and bank accounts. It was for the assessee to explain source of the cash as well as genuineness of the transaction. It was also for the assessee to prove creditworthiness of the persons who have given her the cash. - The first onus is upon the assessee to fulfil the conditions provided u/s 68 of the Income Tax Act up to a reliable degree, only thereafter, the AO would rebut but here the assessee herself has failed to demonstrate the genuineness of the transaction as well as creditworthiness of alleged creditors. - Therefore, the same stand dismissed.

Summary

Issues involved:
Addition of unexplained cash during a search operation under section 132 of the Income Tax Act, 1961 for the Assessment Year 2011-12.

Analysis:

Issue 1: Addition of unexplained cash
The appeal before the Appellate Tribunal ITAT Ahmedabad concerned the addition of ?10,84,400 as unexplained cash found during a search operation under section 132 of the Income Tax Act, 1961. The cash was discovered at the premises of the assessee, with a portion seized and the rest found in a bank locker. The assessee claimed that the cash belonged to a company and was advanced to him as imprest cash for business expenses. However, discrepancies were noted in the ledger account provided by the assessee, and witnesses were requested for testimony but not produced. The Assessing Officer (AO) added the unexplained cash amount to the income of the assessee. The CIT(A) restricted the addition after referring to similar cases within the group. The Tribunal observed that the assessee failed to produce key witnesses and evidence to establish the genuineness of the transaction and creditworthiness of the alleged creditor. The Tribunal upheld the CIT(A)'s decision based on the detailed findings in a similar case within the group, emphasizing the importance of fulfilling the conditions under section 68 of the Income Tax Act to establish the genuineness of transactions.

Conclusion:
Based on the detailed analysis and findings of the Tribunal, the appeal of the assessee was dismissed, affirming the addition of unexplained cash to the income of the assessee. The decision highlighted the significance of providing adequate evidence and fulfilling legal requirements to substantiate claims related to cash transactions during income tax assessments.