2022 (11) TMI 972 - AT - Income Tax

Undisclosed cash receipt as recorded in the seized material - unexplained money u/s 69A - search and seizure action u/s 132 - Reliance on dumb document found from the premise of third party - Assessee allegation that total amount received against the sale of property - HELD THAT - We find that as per the ledger account produced by the assessee all other entries of sale consideration received from M/s Tulsiani Construction and Developers Pvt. Ltd. are matching with the entries recorded in the seized material except one entry of Rs. 15 Lac cash. Therefore, the seized document cannot either be accepted or rejected in part when the assessee has accepted the other entries. Once, the assessee has not disputed the other entries recorded in the seized material then a single entry of Rs. 15 Lac received in cash cannot be denied. CIT(A) has rightly observed that the assessee cannot claim the seized material as dumb document when all other entries are recorded in the seized material are accepted by the assessee. In view of the above facts and circumstances of the case, we do not find any error or illegality in the impugned order of the CIT(A), the same is upheld. Appeal of the assessee is dismissed.

Issues Involved:
1. Addition of Rs. 15,00,000 as unexplained money under Section 69A of the Income Tax Act.
2. Ownership of the alleged unexplained money.
3. Denial of payment by the second party (M/s Tulsiani Construction and Developers Pvt. Ltd.).
4. Double addition of the same amount in the hands of two parties.
5. Basis of addition being assumptions and presumptions without evidence.
6. Ignoring submissions and case laws relied upon by the appellant.
7. Charging of interest under Section 234A of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Addition of Rs. 15,00,000 as unexplained money under Section 69A:
The primary issue concerns the addition of Rs. 15,00,000 by the Assessing Officer (AO) as unexplained money under Section 69A of the Income Tax Act, based on a document seized during a search operation. The document indicated a cash receipt of Rs. 15,00,000 related to a transaction between the assessee and M/s Tulsiani Construction and Developers Pvt. Ltd. The AO noted that this amount was not recorded in the assessee's books of accounts, leading to the addition.

2. Ownership of the alleged unexplained money:
The assessee contended that it had received Rs. 74,23,937 through cheques from M/s Tulsiani Construction and Developers Pvt. Ltd., which was duly reflected in its bank account and books of accounts. The assessee denied receiving the alleged Rs. 15,00,000 in cash. The document in question was a printout from the laptop of an employee of M/s Tulsiani Construction and Developers Pvt. Ltd., which the assessee argued was not sufficient evidence to establish ownership of the money.

3. Denial of payment by the second party:
M/s Tulsiani Construction and Developers Pvt. Ltd. also denied making any cash payment of Rs. 15,00,000 to the assessee. The assessee highlighted that no formal agreement was executed between the two parties, and the advance amount received was to be refunded.

4. Double addition of the same amount:
The assessee argued that the AO erred in making the same addition of Rs. 15,00,000 in the case of M/s Tulsiani Construction and Developers Pvt. Ltd., which resulted in double addition. The principle of law and equity dictates that the same amount cannot be owned by two different entities simultaneously.

5. Basis of addition being assumptions and presumptions:
The assessee contended that the addition was made based on assumptions and presumptions without any corroborative evidence. The AO did not provide any material to substantiate the claim of unaccounted receipt.

6. Ignoring submissions and case laws:
The assessee claimed that the AO ignored the submissions and case laws presented during the assessment proceedings. The assessee argued that no valuable article or thing was found in its possession, and the document in question was not sufficient to justify the addition.

7. Charging of interest under Section 234A:
The assessee also raised an issue regarding the charging of interest under Section 234A of the Income Tax Act while computing the demand.

Judgment Analysis:
The tribunal considered the rival submissions and relevant material on record. It was noted that the assessee had accepted all other entries in the seized document except the cash receipt of Rs. 15,00,000. The tribunal found that the seized document could not be partially accepted or rejected. Since the assessee accepted other entries, the single entry of Rs. 15,00,000 in cash could not be denied. The CIT(A) observed that the document was retrieved from the laptop of an employee of M/s Tulsiani Construction and Developers Pvt. Ltd., making it authentic and correct. The tribunal upheld the addition made by the AO, stating that the assessee failed to justify the information disclosed in the seized material. The appeal of the assessee was dismissed, and the order of the CIT(A) was upheld.

Conclusion:
The tribunal dismissed the appeal of the assessee, upholding the addition of Rs. 15,00,000 as unexplained money under Section 69A of the Income Tax Act. The tribunal found no error or illegality in the impugned order of the CIT(A) and concluded that the seized document could not be partially accepted or rejected. The tribunal emphasized that the assessee failed to justify the information disclosed in the seized material.

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