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2023 (4) TMI 231 - AT - Income TaxUndisclosed income u/s 69 - messages found from the mobile phone of the assessee and inventorized that the assessee was involved in hawala transactions - HELD THAT - Since the Ld. AO herself while passing the assessment order in the case of M/s MG Oils observed that cash was deposited in the bank account of few of the customers by the assessee or by the staff of the firm, M/s MG Oils, this in itself proves that the entire amount of cash received by the assessee as noticed through the messages found from his mobile phone was related to the customers of M/s MG Oils to whom sales were made and duly accounted for in the books of accounts of M/s MG Oils and accordingly, there was no justification for making separate addition to the total income of the assessee on this count. Thus, considering the entire aspect of the matter, we are of the considered opinion that there was no justification for making addition to the total income of the assessee on account of amount worked out on the basis of alleged suspicious messages relating to hawala transactions found from the mobile phone of the assessee by treating it as undisclosed income u/s 69 and the CIT(A) rightly deleted the impugned addition without any ambiguity so as to warrant interference. Decided in favour of assessee.
Issues Involved:
1. Deletion of addition amounting to Rs. 2,08,10,930/- on account of undisclosed income under Section 69 of the Income Tax Act, 1961. Summary: 1. Deletion of Addition on Account of Undisclosed Income: The Revenue appealed against the order of the Ld. CIT(A) which deleted the addition of Rs. 2,08,10,930/- made by the Ld. AO under Section 69 of the Income Tax Act, 1961. The Ld. AO based the addition on suspicious messages found on the assessee's mobile phone, alleging involvement in hawala transactions. The Ld. AO concluded that the messages indicated undisclosed income, but the Ld. CIT(A) deleted the addition, leading to the Revenue's appeal. 2. Assessee's Defense and Ld. CIT(A)'s Observations: The assessee argued that the messages were related to amounts received from the sale of oil by the firm M/s MG Oils and were duly accounted for in the firm's books. The Ld. CIT(A) noted that the Ld. AO had erroneously considered amounts mentioned in the messages multiple times and failed to establish that these amounts represented income accrued to the assessee. The Ld. CIT(A) found that the correct amount, after removing duplications, was Rs. 89,33,930/- and not Rs. 2,08,10,930/-. 3. Business Relationship and Accounting: The Ld. CIT(A) accepted the assessee's explanation that the messages were related to business transactions with SHARMAJI/PANDITJI of Delhi and that the amounts were recorded in the books of M/s MG Oils and M/s Vinod Industries, where the assessee was a partner. The Ld. AO herself acknowledged that cash deposits in customers' bank accounts pertained to M/s MG Oils, supporting the assessee's claim that the amounts were linked to legitimate business transactions. 4. Conclusion and Tribunal's Decision: The Tribunal upheld the Ld. CIT(A)'s decision, agreeing that the Ld. AO's addition was unjustified as it included duplicated amounts and failed to establish that the amounts represented undisclosed income of the assessee. The Tribunal found no merit in the Revenue's appeal and dismissed it, affirming the deletion of the Rs. 2,08,10,930/- addition. Result: The appeal filed by the Revenue was dismissed, and the deletion of the addition by the Ld. CIT(A) was upheld.
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