2018 (1) TMI 587 - AT - Income Tax

Unexplained cash found during search - Held that - CIT(A) gave a categorical finding that the assessee did not claim in the original assessment proceedings that the cash available is out of exchange of old currency if any. This argument is brought forward now and there is no evidence furnished to substantiate this new claim even during the assessment proceeding or appellate proceedings. If the claim of the assessee is correct then the money in serial numbered notes should have come from a single source the details of which the assessee is not in a position to furnish. Therefore, the argument of the assessee is treated to be only an afterthought for which there is no cogent evidence available. . Even before us, the AR of the assessee failed to substantiate the claim of the assessee by way of corroborative evidence and, hence, we find no infirmity in the order of the CIT(A) in confirming the addition made by the AO. Accordingly, we uphold the order of the CIT(A) and dismiss the grounds raised by the assessee

Summary

Issues:
Assessment of unexplained cash found during search.

Analysis:
The appeal was filed by the assessee against the order of CIT(A) relating to the Assessment Year 2008-09. The original assessment under section 143(3) determined the total income at a certain amount. Subsequently, the Hon'ble ITAT provided relief and remitted the issue of unexplained investment to the Assessing Officer. During the reassessment proceedings, the Assessing Officer assessed income on account of currency notes found during the search, as the assessee could not provide a satisfactory explanation for the same. The assessee contended that the cash found was accumulated from earlier withdrawals and exchanged with new currency notes. However, the CIT(A) confirmed the addition made by the AO, stating that the explanation provided by the assessee was an afterthought without any substantiating evidence. The CIT(A) held that the Assessing Officer correctly rejected the explanation and confirmed the addition. The assessee appealed against the CIT(A)'s order, arguing that the addition of unexplained cash was erroneous both on facts and in law. However, the ITAT upheld the CIT(A)'s order, noting that the assessee failed to provide corroborative evidence to support their claim. Consequently, the ITAT dismissed the appeal of the assessee, affirming the addition of unexplained cash as determined by the Assessing Officer.

This case highlights the importance of providing credible and substantiated explanations during assessment proceedings. The ITAT's decision underscores the significance of supporting claims with concrete evidence to avoid being considered as an afterthought. The burden of proof lies with the assessee to establish the legitimacy of their claims, especially in cases involving unexplained cash or investments. The judgment emphasizes the need for thorough documentation and evidence to substantiate assertions made during assessment proceedings to avoid adverse outcomes.