2022 (12) TMI 448 - AT - Income Tax

Addition u/s 69 r.w.s 115BBE - unexplained investment - addition based on the seized material unearthed during the search conducted at the premises of the assessee - HELD THAT - As memoranda cash book has already accepted by the Revenue and the income arising and recorded in the memoranda cash book has already been considered and thus when the assessee claimed set of these income disclosed in the form of assets again the same cannot be taxed in the absence of the contrary finding recorded by the Revenue. The assessee has also contended that the possession of the flat has also not received by the assessee and the investments thus recorded is met with the income disclosed by the father of the assessee and father of the assessee has also not taken any set of disclosed by the assessee since the Revenue did not controvert this fact which is evidently clear and the contention of the assessee is supported by memoranda cash book wherein the relevant entries in support of the arguments of ld. AR of the assessee, In the light of these facts and circumstances, we do not find any infirmity in the detailed finding of ld. CIT(A) and therefore, the Ground raised by the Revenue is dismissed. Addition u/s 69A r.w.s 115BBE - Unexplained cash found from the bedroom of the assessee - no evidence has been furnished by the assessee about the source of money found during the search proceedings - HELD THAT - As not disputed that the money has been found in the wrapped cover wherein the assessee has contended that the money has been received at the time of various rituals ceremony conducted at the time of his marriage. The denomination of cash found also support the contention of the assessee. The ld. AR argued from the memoranda cash book. CIT(A) though has not considered the first argument of the assessee but has very well taken into consideration alternative plea before him that his father is having sufficient cash to cover up the cash found from his bedroom. CIT(A) has given his factual finding and the deleted the addition and we do not find any infirmity in granting credit of the cash available in the memoranda cash book submitted during the course of search assessment by the father of the assessee and the income which also been taxed the cash available in the form of these memoranda of cash book again cannot be taxed. In light of these observations, we do not see any merit in the ground raised by the Revenue and therefore, the Ground No. 3 of the Revenue is dismissed.

Issues Involved:
1. Deletion of addition of Rs. 76,29,000/- made under Section 69 read with Section 115BBE of the Income Tax Act, 1961.
2. Deletion of addition of Rs. 16,43,150/- made under Section 69A read with Section 115BBE of the Income Tax Act, 1961.
3. Validity of approval given under Section 153D of the Income Tax Act, 1961.
4. Charging of interest under Sections 234A, 234B, and 234C of the Income Tax Act, 1961.
5. Initiation of proceedings under Section 271AAC of the Income Tax Act, 1961.

Detailed Analysis:

1. Deletion of Addition of Rs. 76,29,000/-:
The revenue contested that the Commissioner of Income Tax (Appeals) [CIT(A)] was not justified in deleting the addition of Rs. 76,29,000/-, which was based on seized digital data showing investment in flats. The Assessing Officer (AO) added this amount as unexplained investment under Section 69 read with Section 115BBE of the Income Tax Act, 1961, due to the assessee's failure to provide documentary evidence. The CIT(A) deleted the addition, noting that Rs. 40,00,000/- was recorded in the memoranda cash book of the assessee's father, who had sufficient cash balance to cover the investment. The Tribunal upheld the CIT(A)'s decision, emphasizing that the memoranda cash book had been accepted in earlier years and there was no contrary finding from the revenue.

2. Deletion of Addition of Rs. 16,43,150/-:
The revenue argued against the deletion of Rs. 16,43,150/-, found as cash during a search and considered unexplained money under Section 69A read with Section 115BBE. The assessee claimed the cash was received during marriage ceremonies and supported this with the denomination of the notes found. The CIT(A) accepted the alternative plea that the cash could be covered by the cash balance in the memoranda cash book of the assessee's father. The Tribunal found no merit in the revenue's argument and upheld the CIT(A)'s deletion of the addition, noting the factual findings and the availability of cash in the memoranda cash book.

3. Validity of Approval under Section 153D:
The assessee challenged the approval given under Section 153D as being mechanical and without application of mind. The Tribunal found this ground to be technical and infructuous, given that the findings on merits were in favor of the assessee.

4. Charging of Interest under Sections 234A, 234B, and 234C:
This issue was deemed consequential, and the AO was directed to give necessary effect in accordance with the law.

5. Initiation of Proceedings under Section 271AAC:
The Tribunal noted that the levy of penalty under Section 271AAC was not the subject matter of the current appeal and thus did not require adjudication.

Conclusion:
The Tribunal dismissed the revenue's appeal and allowed the assessee's cross-objections for statistical purposes. The Tribunal upheld the CIT(A)'s decisions regarding the deletion of additions and found no merit in the revenue's arguments. The order was pronounced in open court on 08/12/2022.

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