2012 (6) TMI 357 - HC - Income Tax

Determination of unexplained money - search - order of I.T.A.T that search was conducted and cash was found in possession of the assessees statement of assessee that the amount has been kept with him in safe custody by his father Held that - The Tribunal concludes with the presumption that the amount stated in the books of account has not been handed over by the father, but belongs to the assessee, has been withdrawn - the assessee was found in possession of cash, therefore, this is the case where the presumption stands rebutted on the basis of documents, which were produced by the assessee - the presumption cannot be on the basis of the assessee s records only is not correct because the documents that are produced include the books of the father - no question arises for determination and consideration of this appeal.

Issues:
1. Interpretation of Section 132(4A) and section 292C of the Income Tax Act, 1961.
2. Application of Section 69A for determining unexplained money.
3. Assessment of cash found during a search and raid.
4. Presumption regarding ownership of cash found during search.
5. Rebuttal of presumption based on documentary evidence.
6. Re-appreciation of evidence in appellate proceedings.

Interpretation of Section 132(4A) and section 292C of the Income Tax Act, 1961:
The appellant argued that the amount recovered during the search and raid was duly explained and accounted for, received from the father of the assessee, and supported by produced books of account. The counsel contended that the presumption under Section 132(4A) and section 292C should be raised and there is a legal rebuttal available. However, the court disagreed, stating that the search revealed cash in possession of the assessees, and discrepancies in the explanations provided by the assessee's father regarding the source of the cash raised doubts on the ownership and origin of the money.

Application of Section 69A for determining unexplained money:
The court examined the invocation of Section 69A to assess the unexplained money. It was noted that the father of the assessee failed to show any entry of the cash received in his books of account, leading to doubts about the source and legitimacy of the funds. The court emphasized the importance of maintaining accurate financial records to avoid suspicion under Section 69A.

Assessment of cash found during a search and raid:
The court scrutinized the circumstances surrounding the cash found during the search and raid, emphasizing the discrepancies in the explanations provided by the assessees regarding the origin and ownership of the money. The court highlighted the importance of establishing a clear trail of ownership and legitimate sources of income to avoid allegations of undisclosed income.

Presumption regarding ownership of cash found during search:
The court analyzed the statements and records related to the cash found during the search, particularly focusing on the conflicting explanations provided by the assessees and their father. The court noted the inconsistencies in the statements and lack of concrete evidence to support the claim that the cash belonged to the father and not the assessee.

Rebuttal of presumption based on documentary evidence:
The court discussed the rebuttal of the presumption regarding the ownership of the cash based on documentary evidence. It emphasized that the documents produced, including the books of the father, were crucial in establishing the true ownership of the funds. The court rejected the argument that the presumption could not solely rely on the assessee's records, as the father's financial records were also considered in the assessment.

Re-appreciation of evidence in appellate proceedings:
The court concluded that the appellate proceedings should not involve re-appreciation of evidence on factual merits. It upheld the findings of the Income Tax Appellate Tribunal, stating that the conclusions drawn by the Assessing Officer were legally sound and supported by the evidence on record. The court dismissed the appeal, emphasizing that no new questions for consideration arose, and no costs were awarded in the case.

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