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2025 (3) TMI 1116 - AT - Income TaxAdditions u/s 69A - unexplained income - HELD THAT - We observe that the assessee had submitted cash book for various years under consideration on the basis of cash withdrawn / deposited by the assessee in his bank accounts held with various banks. AO has not pointed out any source of income of the assessee apart from salary income and there is no allegation that the assessee had earned any unexplained income outside the books of accounts. Further there is no allegation by the Department that the cash so withdrawn by the assessee from his bank accounts was not available with the assessee for being re-deposited in his bank account. It is a well settled principle that if the AO has not brought on record any evidence to show that the cash withdrawals made by the assessee has been used elsewhere and that the same were not available with the assessee for re-depositing then it has to be presumed that the subsequent re-deposit in the bank accounts were sourced out of earlier withdrawals made by the assessee from his bank account. Accordingly since opening cash balance was sourced out of withdrawals made from the assessee s bank accounts and since there was no specific allegation that the amount was not available with the assessee for re-depositing the opening cash balance cannot be added as income of the assessee u/s 69A of the Act. Addition u/s 69A - HELD THAT - Since there is no specific allegation that the assessee had utilized the cash withdrawals elsewhere in our view there is no reason for the Assessing Officer to make addition u/s 69A of the Act. On going through the facts of the instant case we observe that no specific observations were made by the AO while making the addition that the assessee had utilized the cash withdrawals elsewhere and further the Assessing Officer has not pointed out as to why the cash withdrawn by the assessee from his bank account was not available with the assessee for re-deposit. Accordingly keeping in view the assessee s facts the addition is directed to be deleted. Addition received by the assessee from sale of cars - HELD THAT - Sale of Renault Fluence Car and Santro Cars are concerned complete details with regards to the purchaser were furnished by the assessee during the course of assessment proceedings and the only reason why the addition was made in the hands of the assessee was only on the ground that the purchaser failed to respond to notices issued by the Income Tax Department. No other adverse inference / observations was made by the AO/ CIT(A) while confirming the addition in the hands of the assessee. Accordingly looking into the assessee s set of facts in our considered view addition on sale of Fluence car and Santro car are liable to be deleted. Sale of Mercedes Benz car - Assessee has not brought anything on record to controvert the findings made by the Assessing Officer / CIT(A) while confirming the addition. The only submission given by the assessee is that the car was sold through an agent. However apart from this statement no this has been brought on record to controvert the findings of the AO and the assessee in our view has not been able to establish the genuineness of the sale of Mercedes Car. Therefore on going through the records of the assessee s case we find no infirmity in the order of CIT(A) so as to call for any interference. Accordingly addition on sale of Mercedes Benz car is liable to be sustained in the hands of the assessee. Addition received from Late Prabhatsinhji Thakor as contribution for joint venture u/s 68 - HELD THAT - Joint Development deal with Shri Prabhatsingh Attaji Thakore did not materialize and the land development in terms of the MOU never took place. Further we were also informed that the money so statedly received by the assessee from Shri Prabhatsingh Attaji Thakore was also never returned back by the assessee. Although the confirmation of Shri Prabhatsingh Attaji Thakore was placed on record however in our considered view this itself does not prove the genuineness of the transaction and nor does it prove the creditworthiness of the party. Shri Prabhatsingh Thakore had not filed return of income for the impugned year under consideration and nothing has been brought on record to show the creditworthiness of Shri Prabhatsingh Attaji Thakore to advance such substantial amount to the assessee. Bogus sale of shares u/s 69A - assessee submitted that all evidences regarding transaction of shares viz. Shares transfer Form audited accounts of the purchaser company etc. were furnished and that there is no doubt that such sale of shares were made by the assessee in lieu of cash - HELD THAT - We are of the considered view that the assessee has failed to furnish the creditworthiness of M/s. Fincruise Services Pvt. Ltd. and there is nothing on record to show that M/s. Fincruise Services Pvt. Ltd. paid an amount of Rs. 49, 99, 990/- to the assessee in cash. Assessee despite being given several opportunities did not produce cash book of the purchaser company to show separate cash payment. Further in absence of cash book of M/s. Fincruise Services Pvt. Ltd. it is also not possible to ascertain whether the purchaser company had availability of cash at the relevant time to make such share purchase in cash as stated by the assessee. Accordingly keeping in view the fact of assessee s case we find no infirmity in the order of CIT(A) so as to call for any interference.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal in this appeal were:
ISSUE-WISE DETAILED ANALYSIS 1. Addition of Rs. 88,64,304/- under Section 69A Relevant legal framework and precedents: Section 69A of the Act deals with unexplained money, where the assessee is found to be in possession of money not recorded in the books of accounts and for which no explanation is provided. Court's interpretation and reasoning: The Tribunal noted that the assessee had provided a cash book based on withdrawals from his bank accounts, and there was no evidence of other income sources apart from salary. Key evidence and findings: The cash book was prepared from bank withdrawals, and the Assessing Officer did not dispute the source of income. Application of law to facts: The Tribunal held that since the withdrawals were not proven to be used elsewhere, the re-deposit of cash was presumed to be from these withdrawals. Conclusions: The addition of Rs. 88,64,304/- was deleted. 2. Addition of Rs. 20,90,000/- under Section 69A Relevant legal framework and precedents: Similar to the first issue, Section 69A applies. Court's interpretation and reasoning: The Tribunal observed no specific allegations that the cash withdrawals were used elsewhere. Key evidence and findings: The Assessing Officer failed to point out discrepancies in the cash flow statement. Application of law to facts: The Tribunal found that the unexplained portion of cash withdrawals was not adequately justified by the Assessing Officer. Conclusions: The addition of Rs. 20,90,000/- was deleted. 3. Addition of Rs. 36,10,000/- on account of sale of cars Relevant legal framework and precedents: The sale of assets and the corresponding cash transactions need to be substantiated with evidence. Court's interpretation and reasoning: The Tribunal distinguished between the sales of Renault Fluence and Santro cars, where details were furnished, and the Mercedes Benz, where inconsistencies were found. Key evidence and findings: For the Renault and Santro cars, the non-response of purchasers was the only issue; for the Mercedes, the purchaser's statement contradicted the assessee's claim. Application of law to facts: The Tribunal held that the sales of Renault and Santro were substantiated, but the Mercedes sale was not. Conclusions: The addition of Rs. 12,00,000/- was deleted, while Rs. 24,10,000/- was sustained. 4. Addition of Rs. 1,10,00,000/- under Section 68 Relevant legal framework and precedents: Section 68 deals with unexplained cash credits, requiring the assessee to prove identity, creditworthiness, and genuineness. Court's interpretation and reasoning: The Tribunal noted the lack of evidence for the creditworthiness of the payer and the absence of tax returns. Key evidence and findings: The MOU did not mention the cash receipt, and the payer's financial status was not verified. Application of law to facts: The Tribunal found the transaction lacked credibility and the assessee failed to discharge the burden of proof. Conclusions: The addition of Rs. 1,10,00,000/- was sustained. 5. Addition of Rs. 49,99,900/- regarding sale of shares Relevant legal framework and precedents: Section 69A applies to unexplained money, requiring evidence of the transaction. Court's interpretation and reasoning: The Tribunal noted the lack of evidence for cash payment and the absence of the purchaser's cash book. Key evidence and findings: The transaction was off-market, and the assessee was a director in the purchasing company, raising questions on the transaction's genuineness. Application of law to facts: The Tribunal found the assessee failed to prove the transaction's genuineness and the purchaser's creditworthiness. Conclusions: The addition of Rs. 49,99,900/- was sustained. SIGNIFICANT HOLDINGS The Tribunal established the following principles:
The Tribunal's final determinations were:
The appeal was partly allowed.
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