DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, LUDHIANA, LUDHIANA V. SH. INDERPAL SINGH, LUDHIANA

ITA 485/CHANDI/2023

AI Insights

The case revolves around an appeal by the Department against the order of the CIT(A)-5, Ludhiana, which pertained to the Assessment Year 2019-20. The primary issue was the deletion of an addition of Rs. 1,00,12,500 under section 69 of the Income Tax Act, 1961, concerning unexplained cash found in lockers during a search operation. The Department contended that the CIT(A) erred in deleting the addition, arguing that the assessee changed his statement regarding the source of the cash and that there was no documentary evidence to support the claim that the cash was received from the sale of a flat by the assessee's wife. The Tribunal, however, found that the CIT(A)'s decision was well-reasoned and supported by the facts, including the acceptance of the cash as part of the joint family property and the substantial capital gain tax charged on the sale of the flat in a separate assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107782 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRAJIT SINGH
• Assessee Lawyers: SUDHIR SEHGAL
• Keywords: Search and seizure

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ,चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT & SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकरअपीलसं./ITA No. 485/CHD/2023 िनधाŊरणवषŊ / Assessment Year : 2019-20 The DCIT, Central Circle-2, Chandigarh बनाम Vs. Shri Inderpal Singh, Prop. M/s Goodwill Elektro Controls, G.T. Road, Miller Ganj, Ludhiana ˕ायीलेखासं./PAN NO: ABTPS8220Q अपीलाथŎ/Appellant ŮȑथŎ/Respondent ( HYBRID MODE ) िनधाŊįरतीकीओरसे/Assessee by : Shri Sudhir Sehgal, Advocate राजˢकीओरसे/ Revenue by : Shri Chandrajit Singh, CIT DR सुनवाईकीतारीख/Date of Hearing : 22.01.2025 उदघोषणाकीतारीख/Date of Pronouncement : 01/04/2025 आदेश/Order Per Krinwant Sahay, AM : Appeal in this case has been filed by the Department against the order dated 03.05.2023of ld. CIT(A)-5, Ludhiana hereinafter referred to as ‘CIT(A)’], for the Assessment Year 2019-20. 2. Grounds of appeal are as under: - 1. That the Ld. CIT(A) is not justified in deleting the addition of Rs. 1,00,12,500/- made u/s 69 of the Income Tax Act, 1961 on amount of unexplained cash 485-Chd-2023 Shri Inderpal Singh, Ludhiana 2 found from the locker No.41 & 42 maintained with SBL Sarabha Nagar, Ludhiana by the assessee. 2. That the Ld. CIT(A) has ignored the facts that the assessee has changed his statement at the time of search assessment proceedings and during the operation of the locker in which the cash was found. 3. That the Ld.CIT(A) has erred in allowing the cash received by the assessee's wife Smt. Raminder Kaur from her sister-in-law Smt. Moninder Kaur while there is no documentary evidence which shows that Smt. Moninder Kaur received cash from sale other flat situated at Delhi has handed over the same to Smt. Raminder Kaur. 4. That the Ld.CIT(A) has erred in considering the facts Unit Smt. Raminder Kaur has operated the locker on 29.10.2018 for depositing the same cash in the locker. 5. The appellant craves leave to add, amend, modify, vary, omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal. 3. The Ld. CIT (DR), referring to the grounds of appeals argued before us that there was search and seizure operations on the assessee on 28.11.2018 and during the course of search and seizure operations, in Locker No. 41 & 42, belonging to Sh. Inderpal Singh and his wife, cash amounting to Rs. 1,00,12,500/- was found. The statement of Sh. Inderpal Singh was recorded on oath on 28.12.2018. Initially, before operation of locker, the assessee stated that the cash of Rs. 80 to 85 lacs was lying in both the lockers and this cash was out of past savings and including the amount handed over to him by 485-Chd-2023 Shri Inderpal Singh, Ludhiana 3 his late father in -law. He also stated that he was not aware of the corresponding bifurcation. 4. The Ld. CIT (DR) with reference to page 3 of the order of Assessing Officer, argued that the assessee was confronted with his statement during operation of locker and the reply of the assessee has been reproduced in the assessment order at page 4 to 5.It was stated by the assessee that the assessee was staying in the joint family, with his father, mother, himself, his wife and his younger brother and his wife.They have also been carrying on the business jointly in partnership and all the jewellery, whether lying at the residence or in different lockers, is joint family jewellery and there is no segregation of the jewellery lying in different lockers of the family. 5. Our attention was drawn to the assessment order page 4, para 5.4, where the reply of the assessee has been reproduced and it has argued by the Ld. CIT (DR) that the said fact was never stated at the time of search of the locker and the said fact had not been stated by any of the family member during the course of search. There is a change of stand by the assessee. Relying upon the order of the Assessing Officer, it was stated that all such claim is after thought and the addition was rightly made. 485-Chd-2023 Shri Inderpal Singh, Ludhiana 4 6. It was further argued by the Ld. CIT (DR) that the relief given by the Ld. CIT(A), just relying upon the submissions of the assessee is not proper. Since each of the family member has separate locker, it does not seem possible that the cash belonging to sale of flat by Smt. Moninder Kaur could have been kept in Locker Nos. 41 6t 42, which was belonging to assessee and his wife, Smt. Raminder Kaur. It was further argued by the Ld. CIT (DR) that why the cash was not kept by Smt. Moninder Kaur in her locker and sought confirmation of addition as made by the AO. 7. The Ld. Counsel of the assessee heavily relied upon the written submissions as filed before the CIT(A). It was further argued that there is a contradictory stand of the department in the sense that other cash, which was found from the locker of the father of assessee,S. Tarlok Singh and from residential premises was considered as'joint family cash' and similarly, in respect of jewellery, which was found from the common residence and different lockers in the names of family members, was stated during the course of searc has 'joint family jewellery'. During the course of assessment proceedings of different family members, the jewellery as found, has been considered as 'joint family' and whatever, jewellery had been declared by different family members in VDIS or otherwise have been considered together 485-Chd-2023 Shri Inderpal Singh, Ludhiana 5 and no adverse view have been taken by the department regarding the jewellery as found during the course of search. 8. Referring to the letter, dated 22.12.2018 as filed before the DDI, Investigation, before the operation of locker, which have been reproduced at page 18 & 19 of the order of CIT(A) and a letter, dated 30.04.2021, which was filed to the Assessing Officer wherein, the source of gold and diamond jewellery as found from the common residence and locker was explained as 'joint family property' and, thus, it was vehemently argued that the cash as found from Locker No. 41 & 42, in the name of assessee and his wife could not be considered in isolation as the family was joint and the sale of flat for a sum of Rs. 3 crores had been accepted by the AO and out of which, Rs. 1.68 crores was received in cash. 9. The counsel of the assessee has further argued that as per agreement found during the course of search, the cash was received at the time of handing over the possession of flat on 01.10.2018 and that cash was handed over by Smt. Moninder Kaur to the wife of the assessee, Smt. Raminder Kaur who kept the cash in safe custody in 'Lockers' in the name of assessee and his wife on 29.10.2018.Certificate from the bank had also been furnished to the AO and, thus, contradictory view could not be taken. Thus, in 485-Chd-2023 Shri Inderpal Singh, Ludhiana 6 nutshell, it was argued that since the gold and diamond jewellery found from the residence and different locker was accepted as joint family gold and diamond jewellery by the Assessing Officer, the same treatment has rightly been given by the Ld. CIT(A) while allowing the appeal of the assessee. 10. It was further argued by the Counsel that no statement of Smt. Moninder Kaur was recorded during the course of search and the same Assessing officer has framed the assessment in the case of Smt. Moninder Kaur and assessed the capital gain on the sale of flat at Rs. 3 crores, for which, the copy of the order has been placed in the Paper Book. Our attention was drawn to the computation of income for the Asstt. Year 2019-20 the said capital gain have been disclosed and, thus, since the cash was received only a month or so before the operation of locker and the department has framed the assessment of Smt. Moninder Kaur and raised the demand in respect of 'capital gain' on sale of flat, the CIT(A) has rightly deleted the addition. 11. We have carefully gone through the assessment order, order of CIT(A), arguments of Ld. CIT (DR) and Ld. Counsel. After considering all the facts and circumstances, we find it is a fact that the father of assessee, Sh. Tarlok Singh and his wife and two sons and their wives and children have been staying in a common residential house at 485-Chd-2023 Shri Inderpal Singh, Ludhiana 7 Gurdev Nagar, Ludhiana, having common kitchen and, the family has the joint business. The Locker of father and two sons with their wives were in one bank. We have also considered the fact that the flat was in the name of Smt. Moninder Kaur at Delhi, which was sold for Rs.3 crores and the possession was handed over on 01.01.2018 as per agreement seized, the cash of Rs. 1.68 crores was received on 01.10.2018.Thereafter, Smt. Moninder Kaur handed over the cash to Smt. Raminder Kaur W/o of the assessee, who kept the part amount in locker on 29.10.2018. As it is seen that the department has accepted the cash having been received by Smt. Moninder Kaur out of sale of flat in her name during assessment proceedings, on which, the substantial amount of capital gain tax has been charged and the same cash was found during the course of search concluded on 28.11.2018. 12. It is also a fact that the Gold and diamond jewellery, which were found from the common residential premises and lockers in the names of different family members was considered joint and no adverse view has been drawn by the department and no statement of Smt.Moninder Kaur had been recorded even before the operation of locker, such-facts were intimated to the DDI, Investigation vide letter, dated 21.12.18. 13. Accordingly, we are of the considered view that the findings given by the Ld. CT(A) are in detail and the order of the Ld. CIT(A) is a 485-Chd-2023 Shri Inderpal Singh, Ludhiana 8 speaking order on all the issues raised in this appeal. Therefore, we find no reason to interfere in the findings given by the Ld. CIT(A). Thus the appeal filed by the Revenue on various issues are hereby dismissed. 14. In the result, appeal of the Revenue is dismissed. Order pronounced on 01/04/2025 Sd/- Sd/- ( RAJPAL YADAV ) ( KRINWANT SAHAY) Vice President Accountant Member “आर.क े.” आदेशकीŮितिलिपअŤेिषत / Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकरआयुƅ/ CIT 4. िवभागीयŮितिनिध, आयकरअपीलीयआिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 5. गाडŊफाईल/ Guard File आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar "