2015 (5) TMI 894 - AT - Income Tax

Unaccounted cash - search and seizure procedings - Held that - As during search statement of assessee s mother Smt. Jashodaben Ravji Majethia from whose possession cash was found, was recorded. In the statement Smt. Jashodaben Ravji Majethia stated the source of cash of ₹ 8,50,000/- out of savings for a period of over 25 years. Since the daughter of Smt. Jashodaben Ravji Majethia Miss Banuben Ravji Majethia, aged 50 years was un-married, money was saved keeping in mind for her future of un-married daughter. As per the statement, husband of the assessee is also aged 85-87 years and therefore looking to the old age and her daughter s condition being un-married, the amount was saved for a period of last 20-25 years from her husband as well as from son s income. The explanation given by Smt. Jashodaben Ravji Majethia during the course of search was not found to be in-correct. Accordingly we do not find any merit in the additions made in the hands of the assessee. - Decided in favour of assesse. Unaccounted jewellery - Held that - The jewellery was found in the cupboard of the mother kept in her room. During the course of preliminary statement itself the mother and sister of the assessee had owned the jewellery and explained the source of the same. The jewellery found is ladies jewellery and hence it cannot belong to the assessee. Further the assessee is a bachelor and hence no addition can be made in the hands of the assessee. Also the statement of Mrs. Jashodaben Ravji Majethia was recorded during the course of search which shows that the jewellery is only out of gifts and never purchased - Decided in favour of assesse Unaccounted cash credit - Held that - Similar addition made on account of creditors in the A.Y. 2008-09 were deleted by the ld. CIT(A) as relying on CIT vs. Computer Force 2010 (7) TMI 831 - ITAT AHMEDABAD wherein held that if the receipt and repayment of the loan is corroborated by the ledger accounts and bank entries, additions in respect of such credits cannot be made. Following the same reasoning given above in the A.Y. 2009-10, we do not find any reason to interfere in the order of ld. CIT(A) deleting the addition made on account of creditors.- Decided in favour of assesse.

Summary

Issues:
Cross appeals by assessee and Revenue against order of ld. CIT(A) for assessment years 2008-09 and 2009-10.

Analysis:
1. Appeal against addition of cash: Assessee appealed against addition of cash under section 69A of the Income Tax Act, 1961. The cash was found during a search at the assessee's residential premises. The assessee claimed that the cash belonged to family members, as stated in their recorded statements. The Tribunal found the explanation provided by the family members to be credible and upheld the appeal, stating that there was no merit in the additions made in the hands of the assessee.

2. Appeal against addition of jewellery: Another appeal was made against the addition of jewellery under section 69A of the Act. The jewellery was found in the mother's cupboard, and the family members explained the source of the jewellery during the search. The Tribunal noted that the jewellery was owned by family members and not the assessee, who was a bachelor. The explanation provided during the search was considered genuine, and the Tribunal found no merit in adding the jewellery to the assessee's income.

3. Appeal against addition of creditors: The A.O. made additions under section 68 of the Act in respect of creditors for the A.Y. 2008-09 and 2009-10. However, the ld. CIT(A) deleted these additions after considering the evidence provided by the assessee. The Tribunal agreed with the ld. CIT(A) and cited various case laws to support the deletion of these additions. The Tribunal found no reason to interfere with the order of the ld. CIT(A) regarding the deletion of additions made on account of creditors.

In conclusion, the Tribunal allowed the appeal of the assessee for the A.Y. 2009-10, dismissed the appeals of the Revenue for the A.Y. 2008-09 and 2009-10, and also dismissed the C.O. filed by the assessee for the A.Y. 2008-09. The judgments were pronounced on 10th April, 2015.