2024 (3) TMI 824 - AT - Income Tax

Addition u/s 69A - unexplained money u/s 69A - assessee has failed to furnish explanation/supporting documents in respect of deposit of cash on various dates and credit of amount in bank account - assessee submitted that he has received cash money from father-in-law at the time of marriage and assessee also filed an affidavit submitted the fact that on account of loss incurred in the speculative transaction. He has also sold the jewellery received by him at the time of marriage and various other subsequent functions - he has also filed a detailed list of gift received at the time of marriage and therefore, considering that aspect of the matter and considering the financial crises/shortage of funds he has deposited the cash which is receipt of gold ornaments and the money lying on him supported by the list of gift received at the time of marriage. HELD THAT - As agreed assessee recently been married and the cash deposit of Rs. 13,85,200/- and credit worth Rs. 14,72,754/- cannot be considered as income of the assessee. Considering all facts and arguments presented before us, we are of the considered view that the addition sustained by the lower authorities is not justified and the same is directed to be deleted. Appeal of the assessee is allowed.

Summary

Issues Involved:
1. Addition of Rs. 14,72,754/- u/s 69A of the IT Act, 1961.
2. Initiation of penalty proceedings u/s 271B, 271(1)(b), and 271(1)(c) of the IT Act.

Summary of Judgment:

1. Addition of Rs. 14,72,754/- u/s 69A of the IT Act, 1961:
The assessee, an individual, filed an income tax return under notice issued u/s 148 of the IT Act, 1961, due to reasons to believe there was an escapement of income amounting to Rs. 13,85,200/-. The Assessing Officer (AO) made an addition of Rs. 14,72,754/- as unexplained money under section 69A of the IT Act, 1961, which included Rs. 13,85,200/- in cash deposits and Rs. 87,554/- from Paras Commo Broking Private Limited. The assessee claimed the sources of these deposits were past savings, gifts, and liquidation of gold/silver ornaments, but failed to provide satisfactory documentary evidence. The CIT(A) confirmed the addition, stating the appellant did not satisfactorily explain the cash/credits appearing in the bank account.

2. Initiation of penalty proceedings u/s 271B, 271(1)(b), and 271(1)(c) of the IT Act:
The CIT(A) dismissed the ground related to the initiation of penalty proceedings as premature since no penalty was levied by the AO.

Tribunal's Decision:
The Tribunal noted that the AO made the addition of Rs. 14,72,754/- as unexplained money u/s 69A due to the assessee's failure to substantiate the cash deposits with satisfactory evidence. The assessee argued that the cash deposits were sourced from the sale of gold and silver ornaments received at the time of marriage, past savings, and recovery of loans and advances. The Tribunal considered the facts, including the affidavit and list of gifts provided by the assessee, and concluded that the cash deposits and credit entries could not be considered as income of the assessee. Therefore, the addition sustained by the lower authorities was not justified and was directed to be deleted.

Result:
The appeal of the assessee was allowed, and the addition of Rs. 14,72,754/- was deleted.