2024 (7) TMI 436 - AT - Income Tax

Unexplained money u/s. 69A r.w.s. 115BBE - cash found during the search - assessee claims himself to be an agriculturalist and doing business of real estate/builder - HELD THAT - Assessee/family agricultural income cannot be doubted and ought to have been accepted. Likewise, according to the assessee had rental income of Rs. 8,47,500/- and commission/brokerage from real estate transactions of Rs. 3 lakhs which totals to Rs. 23,22,500/-, which will be sufficient to explain the balance amount of Rs. 22,89,925/- (sustained by the ld.CIT(A)). Assessee has filed paper book containing more than 53 pages to prove the agricultural income, rental income as well as the commission income and prayed us to remit back issue to AO, since the assessee did not get proper opportunity before the AO. Therefore, relying on the decision in the case of Tin Box Company 2001 (2) TMI 13 - SUPREME COURT we restore the addition back to the file of the JAO. Since, the revenue is not in appeal, we confirm the CIT(A) action of deleting Rs. 4,84,075/-. We direct the assessee to file all the documents to prove the agricultural income, rental income and commission and if the AO finds that the explanation given by the assessee is correct, then no addition may be made or else addition may be sustained. AR, has undertaken to file all the details and participate in the assessment proceedings and the AO to frame in accordance with law. Appeal filed by the assessee is allowed for statistical purposes.

Summary

Issues:
Sole issue: Addition of unexplained cash under section 69A of the Income-tax Act, 1961.

Detailed Analysis:
1. The appeal challenges the addition of Rs. 22,89,925 out of Rs. 27,74,000 found as cash during a search, treated as unexplained money under section 69A of the Act.
2. The assessee, an agriculturist and real estate builder, failed to explain the source of the cash found during a by-election check, leading to a summons under section 131 of the Act.
3. The Assessing Officer added Rs. 27,24,000 as unexplained money under section 69A, which the assessee contested before the ld.CIT(A).
4. The ld.CIT(A) accepted Rs. 4,84,075 as explained money based on cash flow statements, reducing the addition to Rs. 22,89,925.
5. The assessee argued that additional income sources like commission, rental income, and agricultural income were not considered by the ld.CIT(A) to explain the remaining amount.
6. The ld.CIT(A) and AO defended the decision, with the ld.CIT(A) already providing relief of Rs. 4,84,075.
7. The Tribunal noted the assessee's agricultural and rental income, directing a remit back to the Assessing Officer for proper verification, based on the Tin Box Company case.
8. The Tribunal allowed the appeal for statistical purposes, confirming the deletion of Rs. 4,84,075 by the ld.CIT(A) and instructing the assessee to provide necessary documentation for income sources.

This judgment revolves around the challenge to the addition of unexplained cash under section 69A of the Income-tax Act. The case involved the assessee's failure to substantiate the source of cash found during a search, leading to conflicting decisions by the Assessing Officer and ld.CIT(A). The Tribunal emphasized the need for proper verification of additional income sources like agricultural and rental income to determine the legitimacy of the remaining unexplained amount. The decision highlights the importance of providing comprehensive documentation to support income sources and the opportunity for the assessee to participate in the assessment proceedings for a fair resolution.