2022 (2) TMI 759 - AT - Income Tax

Unexplained money u/s. 69A - search operation u/s. 132 - additional income surrendered - Search conducted in the locker which was co-owned by the assessee alongwith her husband - HELD THAT - The facts of the case are not in dispute. In the case of Shri Niraj Kumar, it is very much apparent that the cash seized from the locker jointly owned by Shri Niraj Kumar and Shri Aditya Sharm has been taxed on substantive basis in the hands of the assessee's brother. As gone through the order of the CIT(A) in the case of Shri Aditya Sharma for assessment year 2014-15, wherein Ld. CIT(A) considered the discussion in the case of Sh. Moin Akhtar Qureshi and has, thereafter, reached the conclusion that the cash of ₹ 78,18,500/- is to be taxed in the hands of Shri Aditya Sharma on substantive basis instead of protective basis. Therefore, as per the settled law, the same amount cannot be taxed twice in the hands of two different assesses. Therefore, we have no option but to direct the Assessing officer to delete this addition. Similarly, in the case of Smt. Sujata Sharma CIT(A) has returned the finding that this amount of ₹ 1,15,00,000/- is to be taxed in the hand of Sh. Aditya Sharma on substantive basis instead of protective basis. Therefore, this addition has also been confirmed in the hands of Shri Aditya Sharma. Accordingly, there is no reason to bring the seized cash to tax for the second time in the hands of Smt. Sujata Sharma. Accordingly, we direct the Assessing officer to delete this addition also. Unexplained jewellery found in the locker of Shri Niraj Kumar - we have gone through the 'Panchnama' relating to the search of locker No. G-2123 which was co-owned by Shri Aditya Sharma and Shri Niraj Kumar and have also considered the impact of CBDT Circular No. 1916 dated 11.5.1994. We fully agree with the contention of the Ld. AR that since the jewellery found in the locker was only 339.20 gms and which is being claimed to be belonging to assessee's bhabi and mother, (both married ladies), the benefit of CBDT Circular No. 1916 dated 11.05.1994 should have been given to the assessee. Accordingly, we direct the Assessing officer to delete this addition also. Appeal of assessee allowed.

Issues Involved:
1. Addition of cash found in lockers as unexplained income under Section 69A of the Income Tax Act.
2. Addition of jewellery found in lockers as unexplained income under Section 69A of the Income Tax Act.
3. Double taxation of the same income in the hands of different assessees.

Issue-wise Detailed Analysis:

1. Addition of Cash Found in Lockers as Unexplained Income:

The primary issue was whether the cash found in the lockers co-owned by the assessees and Shri Aditya Sharma should be taxed as unexplained income under Section 69A of the Income Tax Act. The lockers in question were D-855 and G-2123, where substantial amounts of cash were found. The assessees argued that the cash belonged to Shri Aditya Sharma, who had already surrendered this amount for taxation and paid the requisite taxes. They provided evidence, including statements from Shri Aditya Sharma and documents showing tax payments, to support their claim.

The Tribunal found that the cash had indeed been taxed on a substantive basis in the hands of Shri Aditya Sharma, as confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)] in a separate order dated 26.03.2019. Consequently, the Tribunal directed the Assessing Officer to delete the additions made in the hands of the assessees to avoid double taxation, as the same income cannot be taxed twice in different hands.

2. Addition of Jewellery Found in Lockers as Unexplained Income:

The second issue concerned the jewellery valued at ?10,91,868 found in locker G-2123, co-owned by Shri Niraj Kumar and Shri Aditya Sharma. The assessees contended that the jewellery belonged to their mother and sister-in-law, both married women, and cited CBDT Circular No. 1916 dated 11.05.1994, which provides guidelines for not seizing jewellery up to 500 grams per married lady during searches.

The Tribunal agreed with the assessees' contention, noting that the jewellery found weighed only 339.20 grams, which is within the permissible limit under the CBDT Circular. Therefore, the Tribunal directed the Assessing Officer to delete the addition related to the jewellery.

3. Double Taxation of the Same Income:

The Tribunal addressed the issue of double taxation, where the same income was being taxed in the hands of multiple assessees. In both cases, the cash found in the lockers was initially added as unexplained income in the hands of the assessees, despite having been surrendered and taxed in the hands of Shri Aditya Sharma.

The Tribunal emphasized that as per settled law, the same income cannot be taxed twice. Since the CIT(A) had already confirmed the addition of the cash on a substantive basis in the hands of Shri Aditya Sharma, the Tribunal directed the deletion of these amounts from the assessees' income to prevent double taxation.

Conclusion:

In conclusion, the Tribunal allowed the appeals of the assessees, directing the deletion of the additions related to the cash found in the lockers and the jewellery, thereby addressing the issues of unexplained income and double taxation. The Tribunal's decision was based on the evidence provided, the applicable legal provisions, and the principles of preventing double taxation.

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