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2023 (6) TMI 433 - AT - Income TaxUnexplained u/s 69A - cash seized by Police Department - statement of the assessee differed during the Investigation and the assessment proceedings - HELD THAT - Changing of the statement before the authorities below and in the present proceeding constitutes an afterthought which has no evidentiary value in absence of supporting corroborative documentary evidences. Even if, it is presumed that the cash seized pertains to the business cash, it is required to be supported with documentary evidences to substantiate that the cash has been withdrawn from the cash book of the assessee on the date of the seizure or previous day. The purpose of the withdrawal of cash, has been for the treatment of mother illness in Vedanta, Gurgaon, however, he has not produced any documents relating to the either mother illness or her treatment in Medanta Hospital. Meaning thereby, the appellant-assessee has failed to explain the source of cash seized. Accordingly, it has been rightly treated by the CIT(A) as undisclosed income of the appellant u/s 69A after considering both factual evidence such as no cash withdrawals from cashbook and circumstantial evidence of medical prescription of appellant s mother and bills thereof with the support of the decisions of the higher Judicial forums as above. AR failed to filed any documentary evidence or judgement in rebuttal to the contention and citation discussed by the CIT(A) while arriving at the decision in confirming the action of the AO. No infirmity or perversity in the decision of the CIT(A) in confirming the addition as unexplained money u/s 69A and taxed accordingly u/s 115BBE - Decided against assessee.
Issues Involved:
1. Legality of the assessment order under section 143(3) of the Income Tax Act. 2. Validity of the addition of Rs. 10,50,000 under section 69A of the Income Tax Act. 3. Requirement of rejection of books of accounts before applying section 69A. 4. Explanation and evidence regarding the source of the seized cash. Summary of Judgment: 1. Legality of the Assessment Order under Section 143(3): The assessee contended that the assessment order under section 143(3) of the Act was bad in law as it was based on presumptions without detecting any defect in the books of accounts. The tribunal, however, upheld the assessment order, finding no infirmity or perversity in the decision of the Ld. CIT(A). 2. Validity of the Addition under Section 69A: The assessee argued that the addition of Rs. 10,50,000 under section 69A was arbitrary since the cash was recorded in the books of accounts. The tribunal noted that section 69A applies when money is not recorded in the books of account and the assessee fails to satisfactorily explain the source. The tribunal upheld the addition, citing the assessee's inconsistent statements and lack of documentary evidence to substantiate the source of the cash. 3. Requirement of Rejection of Books of Accounts: The assessee argued that the AO did not reject the books of accounts before making the addition under section 69A. The tribunal clarified that there is no compulsion on the AO to reject the books of accounts before applying section 69A, referencing the Hon'ble High Court of Kolkata's decision in Unit Construction Co. Ltd. vs. Jt. CIT. 4. Explanation and Evidence Regarding Source of Seized Cash: The assessee initially stated that the cash was for his mother's treatment and sourced from business income and personal savings. However, the tribunal found that the assessee failed to provide consistent and satisfactory evidence for this claim. The tribunal noted discrepancies in the assessee's statements and the lack of documentary evidence for the treatment at Medanta Hospital, Delhi. The tribunal concluded that the cash was from unexplained sources and upheld the addition under section 69A. Conclusion: The tribunal dismissed the appeal, upholding the addition of Rs. 10,50,000 as unexplained money under section 69A and taxed accordingly under section 115BBE of the Act. The tribunal found the submissions and contentions raised by the assessee devoid of merit.
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