2019 (3) TMI 280 - AT - Income Tax

Addition u/s 69A - search & seizure operation - Not able to reconcile with books of accounts - In statement recorded u/s 132(4) submitted that the amount kept in the locker was past savings of the assessee and his wife for the purpose of performing his daughter s marriage - CIT held that person would go, operate the locker and keep - cash there from time to time, whereas depositing cash in the bank or making a FDR is a better and easier option HELD THAT - CIT(A) simply rejected the explanation given by the assessee without giving any proper reasons. When the assessee has filed returns of income, same are accepted. His wife has also filed returns of income and the same are also accepted and the assessee has submitted that out of savings the amounts are kept in the locker. Assessee has fully explained the sources and he has discharged the burden casted upon him. The A.O. without giving any basis, rejected the explanation of the assessee. In our opinion, the A.O. is not correct. CIT(A) is concerned, he is of the opinion that instead of keeping money in the locker, it is better to deposit in the bank so that the assessee may earn the interest. In our opinion, the assessee is the person who has to decide himself whether to keep the money in the locker or deposit in the bank. In this case, the assessee has decided to keep money in the locker to perform his daughter s marriage and explained the sources. We find that the order passed by Ld. CIT(A) has to be reversed. - Decided in favour of assessee.

Summary

Issues:
1. Assessment of income under section 69A based on cash found during search operation.
2. Rejection of explanation by Assessing Officer and CIT(A) regarding the source of cash found in locker.
3. Appeal before the Tribunal challenging addition under section 69A.

Analysis:
1. The appeal was against the order of CIT(A) for the assessment year 2013-14 concerning the assessment of income under section 69A based on cash found during a search operation under section 132 of the Income Tax Act, 1961. The assessee, an individual and employee of a group engaged in Builders and Developers business, had cash amounting to ?9,25,000 found in a locker during the search.
2. The Assessing Officer (A.O.) and CIT(A) rejected the explanation provided by the assessee regarding the source of the cash found in the locker. The A.O. assessed the entire income under section 69A, stating that the explanation given by the assessee was not acceptable as it was considered self-serving and an afterthought. The CIT(A) upheld the A.O.'s decision, emphasizing that depositing cash in a bank would have been a better option than keeping it in a locker.
3. The Tribunal, after considering the submissions and evidence, found that the assessee had adequately explained the source of the cash found in the locker as past savings for his daughter's marriage. The Tribunal disagreed with the CIT(A)'s reasoning, stating that it was the assessee's prerogative to decide where to keep the money. The Tribunal noted that the A.O. had failed to provide a proper basis for rejecting the assessee's explanation and reversed the CIT(A)'s decision, allowing the appeal filed by the assessee.

In conclusion, the Tribunal allowed the appeal, overturning the decisions of the lower authorities and emphasizing that the assessee had sufficiently explained the source of the cash found during the search operation, thereby discharging the burden of proof imposed on him.