2024 (6) TMI 532 - AT - Income Tax

Addition u/s 69A - un-explained money Found during a search action - search action at the premises of the assessee gold jewellery totaling to 100 grams, silver jewellery of 20 grams, silver coins of 30 grams and cash amount were found - HELD THAT - Assessee not only filed the balance sheet and cash book before the AO but also submitted before the Commissioner in order to demonstrate the balance of Rs. 4,00,792/- recorded in the regular books of account. The assessee further in his written submissions has also disclosed the source of Rs. 4,82,275/- having been accumulated/received from relatives on various occasions as well as by the family members of the assessee which the assessee has recorded in his books of account. Commissioner not only failed to consider the balance sheet and cash book submitted by the assessee but in fact held contrary that the assessee has not been able to furnish any documentary evidence qua his claims regarding the cash found and therefore on this count itself, the impugned order is liable to be set aside. We otherwise also do not find any reason or material on record contrary to the claim of the assessee and to affirm the addition. Hence, considering the peculiar facts and circumstances specific to the effects that the assessee has been able to demonstrate the source of amount we are inclined to delete the addition as made by the AO under section 69A of the Act and affirmed by the Commissioner - Appeal filed by the assessee stands allowed.

Summary

Issues involved:
The appeal against the order passed by the Ld. Commissioner of Income Tax (Appeals) under section 250 of the Income Tax Act, 1961 for the A.Y. 2019-20 regarding the addition of unexplained cash found during a search action.

Summary:

Issue 1: Declaration of Income and Addition of Unexplained Cash
The assessee declared total income and claimed deductions in the return filed, but during a search action, unexplained cash and jewellery were found. The Assessing Officer treated the cash amount as unexplained money under section 69A of the Act. The Ld. Commissioner affirmed the addition, stating lack of documentary evidence to support the claims made by the assessee regarding the cash found.

Issue 2: Challenge and Hearing
The assessee challenged the addition before the Appellate Tribunal, presenting balance sheet and cash book as evidence. The written submissions of the assessee clarified the source of the cash found, attributing it to savings, gifts, and recorded amounts in the books of account. The Tribunal considered the evidence submitted by the assessee and found no reason to affirm the addition, ultimately deleting the added amount from the assessee's income.

In conclusion, the Appellate Tribunal allowed the appeal filed by the assessee, setting aside the addition of the unexplained cash amount as made by the Assessing Officer and affirmed by the Ld. Commissioner.