2023 (4) TMI 620 - AT - Income Tax

Addition u/s 69A r/w section 115BBE - unexplained income representing on-money received - loose document found during the search and seizure action - HELD THAT - Not Only the father of the assessee but Mr. Mangesh D. Gaikar also admitted to the fact that the money paid by the assessee in fact belong to Mr. Mangesh D. Gaikar, which was returned to Mr. Mangesh D. Gaikar and the same has been recorded in the loose document found during the search and seizure action at the premises of Mr. Mangesh D. Gaikar. We are of the considered opinion that once the Revenue in the case of Mr. Mangesh D. Gaikar, has held that Mr. Mangesh D. Gaikar was receiving maintenance charges in cash and not recording the same in the books of account as collection, there is no merits in rejecting the submission of the assessee on the basis that transaction in cash was not recorded in books and no documentary evidence was produced. Once the non-maintainability of the books of account in respect of the cash received has been found by the Revenue after a detailed examination in the case of Mr. Mangesh D. Gaikar, asking the assessee to produce the documentary evidence is contrary to their own findings. When the claim of the assessee has been duly corroborated by the statement of Mr. Mangesh D. Gaikar and assessee s father, and Mr. Mangesh D. Gaikar, has been taxed in respect of the aforesaid cash receipt as unaccounted income, we find no basis in upholding addition in the hands of the assessee - Assessing Officer is directed to delete the impugned addition. As a result, grounds raised by the assessee are allowed.

Summary

Issues:
Challenge to order passed under section 250 of the Income Tax Act, 1961 for the assessment year 2018-19.

Analysis:
1. The assessee contested the order passed by the Commissioner of Income Tax (Appeals) under section 250 of the Income Tax Act, 1961. The grounds of appeal included challenges to the assessment made by the Assessing Officer under section 143(3) of the Act, specifically regarding the addition of Rs.10,00,000 under section 69A r/w section 115BBE.

2. The brief facts of the case revealed that the assessee, engaged in property brokerage and commission business, was involved in a search and seizure action conducted in connection with Umesh D. Tanna and Mangesh D. Gaikar group. The Assessing Officer added Rs.10 lakh to the assessee's income as unexplained income due to a cash transaction on 23/10/2017. The CIT(A) upheld this addition, questioning the source of the cash and rejecting explanations provided by the parties involved.

3. During the appeal, the assessee argued that the amount in question did not belong to him but was handed over to Mangesh D. Gaikar on behalf of his father. The AR highlighted statements and submissions supporting this claim. In contrast, the DR emphasized the lack of entries in the father's cash book and the absence of concrete evidence regarding the ownership of the cash amount.

4. The Tribunal examined the evidence, including documents seized during the search, statements of the parties involved, and submissions made during assessment proceedings. It noted that both the father of the assessee and Mangesh D. Gaikar acknowledged that the cash paid by the assessee belonged to the latter. Additionally, Mangesh D. Gaikar was taxed for unaccounted income related to the same cash transaction. Given these findings, the Tribunal concluded that the addition in the hands of the assessee was unwarranted, directing the deletion of the added amount.

5. Consequently, the Tribunal allowed the appeal by the assessee, setting aside the impugned addition and directing the Assessing Officer to remove the Rs.10,00,000 addition from the assessee's income.

This detailed analysis of the judgment highlights the issues raised, the facts of the case, arguments presented, and the Tribunal's decision based on the evidence and legal provisions involved.