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2021 (7) TMI 687 - AT - Income TaxCash found on the date of search - Since the assessee could not satisfactorily explain source, the AO treated the the cash amount as treated as undisclosed income of the assessee and brought to tax - HELD THAT - The assessee has changed his stand on different levels of the proceedings. At the time of search and seizure operation, he stated that the cash belongs to his wife and at the time of assessment proceedings, he stated that the cash belongs to his son. Further, he stated that it belongs to SNR Nirmal India (P) Ltd. As per the above section, it is clear that the cash was found in the assessee s residential premises, which was not explained to the satisfaction of the AO with corroborative evidence as well as before the CIT(A) also. We, therefore, relying on the judgments of CIT Vs. Durga Prasad More 1968 (8) TMI 17 - SUPREME COURT and the case of Sumathi Dayal 1995 (3) TMI 3 - SUPREME COURT we uphold the order of the CIT(A) and dismiss ground Nos. 1 2 raised by the assessee on this issue.
Issues Involved:
1. Sustaining the addition of ?17,20,000 as unexplained cash found during search. 2. Validity of the revised return filed by the assessee. 3. Addition of ?2,00,000 for the purchase of agricultural land (not pressed by the assessee). Issue-wise Detailed Analysis: 1. Sustaining the addition of ?17,20,000 as unexplained cash found during search: The primary issue under consideration is the addition of ?17,20,000 as unexplained cash found during a search operation at the assessee’s residence. The assessee initially claimed that the cash belonged to his wife, received from her mother. However, during assessment proceedings, the assessee altered his stance, stating that the cash belonged to his son, derived from SNR Nirman India Pvt. Ltd. The Assessing Officer (AO) did not find the explanation satisfactory and treated the cash as undisclosed income. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], asserting that the cash belonged to SNR Nirman India Pvt. Ltd., where his son is the Managing Director. The CIT(A) rejected this claim, noting inconsistencies in the assessee’s statements and lack of supporting evidence. The CIT(A) emphasized that the assessee’s initial claim that the cash belonged to his wife was unsubstantiated, and the subsequent claim regarding his son’s company was deemed an afterthought. Before the Income Tax Appellate Tribunal (ITAT), the assessee reiterated previous submissions. The ITAT upheld the CIT(A)’s decision, agreeing that the assessee failed to provide corroborative evidence to substantiate his claims. The Tribunal cited Section 292C of the Income Tax Act, which presumes that money found during a search belongs to the person in possession unless proven otherwise. The ITAT concluded that the assessee’s inconsistent statements and lack of evidence justified the addition as undisclosed income. 2. Validity of the revised return filed by the assessee: The assessee filed an original return of income for the Assessment Year (AY) 2015-16 on 31-10-2015, declaring a total income of ?18,38,610. A revised return was filed on 31-03-2016, declaring a total income of ?68,77,220. However, since the original return was filed after the due date, the revised return was treated as invalid. The case was selected for compulsory scrutiny, and the AO made several additions, including undisclosed interest income, unaccounted cash, undisclosed business income, and unexplained source of payment. 3. Addition of ?2,00,000 for the purchase of agricultural land (not pressed by the assessee): The assessee initially contested the addition of ?2,00,000 for the purchase of agricultural land, claiming sufficient sources for the payment. However, during the hearing, the assessee did not press this ground of appeal, leading to its dismissal as not pressed. Conclusion: The ITAT dismissed the appeal, upholding the CIT(A)’s decision to sustain the addition of ?17,20,000 as unexplained cash. The Tribunal found no merit in the assessee’s claims and emphasized the lack of corroborative evidence and inconsistencies in the statements provided at different stages of the proceedings. The ITAT also noted the invalidity of the revised return due to the late filing of the original return. The addition of ?2,00,000 for the purchase of agricultural land was dismissed as not pressed by the assessee. Pronouncement: The appeal of the assessee was dismissed, and the judgment was pronounced in the open court on 15th July, 2021.
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