ADARSH HEGDE, MUMBAI V. ACIT CEN CIR 44, MUMBAI

ITA 1839/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5889 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 28-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANADI VARMA
• Assessee Lawyers: B B JHAVERI
• Keywords: Reasonable cause; Onus to prove; Condonation of delay; Set aside
• Section: 273B; 27; 132; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENCH M UMBAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER & SHRI RAM LAL NEGI, JUDICIAL MEM BER ITA NO.1839/MUM/2016 ( ASSESSMENT YEAR :2010-11 ) ADARSH HEGDE 5 TH FLOOR DIAMOND SQUARE CST ROAD, KALINA SANTACRUZ (EAST) MUMBAI-400 098 VS. DCIT,CENTRAL CIRCLE-8(1) ROOM NO.656, 6 TH FLOOR AAYKAR BHAWAN M.K.ROAD MUMBAI-400 020 PAN/GIR NO. AA BPH5562P APPELLANT ) .. RESPONDENT ) ASSESSEE BY B.B.JHAVERI REVENUE BY ANADI VARMA DATE OF HEARING 25/07/2019 DATE OF PRONOUNCEMENT 09/ 0 8 /201 9 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)38, MUM BAI, DATED 28/03/2014 AND IT PERTAINS TO THE ASSESSMENT YEAR 2 010-11. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- I) THE COMMISSIONER (APPEALS) ERRED IN CONFIRM ING THE ADDITION OF RS. 18 LACS BEING THE CASH FOUND IN THE COURSE OF SEARC H AT THE RESIDENCE OF THE ASSESSEE EVEN THOUGH IN THE COURSE OF SEARCH WHILE RECORDING THE STATEMENT OF THE ASSESSES, IT WAS EXPLAINED THA T THE SAID CASH WAS BELONGING TO HIS CO-BROTHER, SHRI SANATH KUMAR SHETTY AND SHRI SANATH KUMAR SHETTY OVER TELEPHONE AT THAT TIME ACC EPTED THAT ME SAID CASH BELONGED TO HIM AND SUBSEQUENTLY FILED TH E AFFIDAVIT IN SUPPORT THEREOF. ITA NO.1839/MUM/2016 ADARSH HEGDE 2 II) THE COMMISSIONER (APPEALS) ERRED IN OBSER VING THAT THE ASSESSEE COULD NOT PRODUCE THE BUS TICKET OF MR, PRASAD SHET TY, ENGINEER AND EMPLOYEE OF SHRI SANATH KUMAR SHETTY, WHO HAD TRAVE LLED FROM MANGALORE TO BOMBAY WITH CASH AND THE SAME WAS DELI VERED AT THE RESIDENCE OF THE ASSESSEE. III) THE COMMISSIONER (APPEALS) ERRED IN CONFI RMING THE ADDITION OF RS. 18 LACS ON THE GROUND THAT THE ASSESSEE FAILED TO E STABLISH THE CLAIM WITH REGARD TO THE ALLEGED TRANSACTION OF THE PROPE RTY DEAL AS THE ASSESSEE HAS NOT PRODUCED CONFIRMATION LETTER FROM THE PARTY CONCERNED OR ANY OTHER EVIDENCE TO PROVE HIS CLAIM. IV) THE COMMISSIONER (APPEALS) FAILED TO APPR ECIATE THAT AT THE FIRST AVAILABLE OPPORTUNITY B THE COURSE OF ME SEARCH, TH E ASSESSEE HAD EXPLAINED AND PROVED THAT THE CASH FOUND AT HIS RES IDENCE IS BELONGING TO SHRI SANATH KUMAR SHETTY AND WHO HAD A CCEPTED OWNERSHIP OF THE SAME OVER TELEPHONE BEFORE THE OFF ICER OF ME INVESTIGATION WING AND HENCE, THE ADDITION OUGHT NO T TO HAVE BEEN MADE TO THE INCOME OF THE ASSESSEE, MORE SO WHEN TH E ENTRIES IN RESPECT OF THE SAID CASH WERE RECORDED IN THE BOOKS OF SHRI SANATH KUMAR SHETTY. V) THE ORDER OF THE COMMISSIONER (APPEALS) CON FIRMING THE ADDITION OF RS.L8 LACS IS BAD IN LAWS AND WITHOUT JURISDICTION. VI) YOUR APPELLANT CRAVES LEAVE TO ADD IT TO, ALTER, AMEND OR DELETE ANY OF THE FOREGOING GROUNDS OF APPEAL. 3. AT THE OUTSET, THE LD. COUNSEL, FOR THE ASSESSEE SUBMITTED THAT THERE IS A DELAY OF 655 DAYS IN FILING PRESENT APPE AL BEFORE THE ITAT, FOR WHICH NECESSARY APPLICATION HAS BEEN FILED FOR CONDONATION OF DELAY ALONG WITH AFFIDAVIT EXPLAINING REASONS FOR S UCH DELAY. THE LD. AR, FURTHER SUBMITTED THAT THE ASSESSEE COULD NOT F ILED APPEAL WITHIN THE PRESCRIBED TIME LIMIT PROVIDED UNDER THE ACT, F OR REASONS BEYOND HIS CONTROL, DUE TO THE FACT THAT THE ORDER OF THE LD. CIT(A) DATED 28/03/2014 WAS SERVED TO THE RESIDENCE OF THE ASSE SSEE, WHICH WAS UNNOTICED, BECAUSE OF NEGLIGENCE OF AN EMPLOYEE WHO WAS WORKING ITA NO.1839/MUM/2016 ADARSH HEGDE 3 AT RESIDENCE. THE LD. AR, FURTHER SUBMITTED THAT WH EN THE LD. AO ISSUED SHOW CAUSE NOTICE FOR LEVY OF PENALTY U/S 27 1AAA OF THE ACT ,ON 07/03/2016, IT WAS CAME TO THE KNOWLEDGE OF THE ASSESEE THAT THE CIT(A) HAS DISPOSED OFF THE APPEAL ON 28/03/201 4. THE ASSESSEE IMMEDIATELY AFTER CAME TO KNOW THAT THE AP PEAL HAS BEEN DISPOSED BY THE LD. CIT(A), OBTAINED COPY OF APPELL ATE ORDER FROM OFFICE OF THE CIT(A) ON 21/03/2016 AND THEREAFTER, APPEAL HAS BEEN FILED ON 28/03/2016. THE DELAY IN FILING APPEAL IS DUE TO THE MISTAKE OF AN EMPLOYEE. THEREFORE, THERE IS NO DELIBERATE I NTENTION NOT TO FILE APPEAL WITHIN THE TIME ALLOWED UNDER THE ACT AND HE NCE, IN INTEREST OF JUSTICE, THE DELAY IN FILING APPEAL MAY BE CONDO NED AND THE APPEAL MAY BE DISPOSED-OFF ON MERITS. IN THIS REGARD, HE R ELIED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CO LLECTOR OF LAND ACQUISITION VS MS. KATIJI & ORS. 167 ITR 471. THE ASSESSEE HAS ALSO RELIED UPON THE DECISION OF ITAT, MUMBAI, IN THE CA SE OF M/S. LAHOTI OVERSEAS LTD. VS DCIT IN ITA.NO. 3786/MUM/2012. 4. THE LD. DR, ON THE OTHER HAND, STRONGLY OPPOSING CONDONATION APPLICATION FILED BY THE ASSESSEE SUBMITTED THAT RE ASON GIVEN FOR NOT FILING APPEAL WITHIN THE DUE DATE PRESCRIBED UNDER THE ACT, DOES NOT COME UNDER REASONABLE CAUSE, THEREFORE, THE CONDONA TION APPLICATION FILED BY THE ASSESSEE SHOULD NOT BE ENT ERTAINED. THE LD. ITA NO.1839/MUM/2016 ADARSH HEGDE 4 DR, FURTHER SUBMITTED THAT ALTHOUGH, THE ASSESEE CL AIMS TO HAVE NOT NOTICED COMMUNICATION OF ORDER FROM THE OFFICE OF T HE CIT(A), BUT SUCH ARGUMENTS IS NOT BASED ON ANY DOCUMENTARY EVI DENCES. THEREFORE, MERE FILING AN AFFIDAVIT EXPLAINING REAS ONS COULD NOT SUFFICIENT ENOUGH TO EXPLAIN HUGE DELAY OF 655 DAYS . THEREFORE, THERE IS NO REASON TO CONDONE DELAY IN APPEAL FILED BY TH E ASSESEE. IN THIS REGARD, HE RELIED UPON BY THE DECISION OF ITAT, PUN E BENCH IN THE CASE OF DCIT VS VEENA INDUSTRIES LIMITED (120 ITD 481). 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED MATERIAL S AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW. WE HAVE CAREFULLY CONSIDERED REASONS GIVEN FOR NOT FIL ING APPEAL WITHIN THE DUE DATE PROVIDED UNDER THE ACT, AND FOUND THAT THE REASONS GIVEN BY THE ASSESSEE THAT HE COULD NOT NOTICED SER VICE OF ORDER FROM THE OFFICE OF THE CIT(A) DUE TO MISTAKE OF ASS ESSEE WORKING AT RESIDENCE APPEARS TO BE REASONABLE AND COMES WITHIN THE MEANING OF REASONABLE CAUSE, AS PROVIDED U/S 273B OF THE I. T.ACT, 1961. WE FURTHER NOTED THAT ORDINARILY, A LITIGANT DOES NOT STAND TO BENEFIT BY FILING AN APPEAL LATE, RATHER IT CREATES UNDUE HARD SHIP TO THE LITIGANT, BECAUSE OF TAX DEMAND. THEREFORE, WHEN THE APPELLAN T GIVES REASONS, FOR NOT FILING THE APPEAL WITHIN THE DUE DATE PRESCRIBED UNDER THAT AND SUCH REASONS ARE SUPPORTED BY NECESS ARY SWORN ITA NO.1839/MUM/2016 ADARSH HEGDE 5 AFFIDAVIT, THEN MERELY FOR THE REASON OF NO SUPPORT ING EVIDENCES, THE CONTENTS OF AFFIDAVIT CANNOT BE IGNORED. FURTHER R EFUSING TO CONDONED DELAY CAN RESULT IN MEROTIOUS MATTER BEING THROWN OUT THE VERY THRESHOLD AND CAUSE OF JUSTICE BEING DEFEATED. AS AGAINST THIS, WHEN THE DELAY IS CONDONED, THE HIGHEST THAT CAN HA PPEN IS THAT A CAUSE WOULD BE DECIDED ON MERITS AFTER HEARING THE PARTIES. NO DOUBT, IT IS THE DUTY OF THE APPELLANT TO EXPLAIN E VERY DAY DELAY WITH REASONABLE CAUSE. WHEN, THE ASSESSE HAS EXPLAINED D ELAY IN FILING APPEAL WITH REASONABLE CAUSE, THEN THE APPELLATE AU THORITIES ARE BOUND TO CONDONED THE DELAY IN FILING OF APPEAL, BE CAUSE WHEN SUBSTANTIAL JUSTICE AND TECHNICAL CONSIDERATION ARE PITTED AGAINST EACH OTHER, THE CAUSE OF SUBSTANTIAL JUSTICE DESER VES TO BE PREFERRED, FOR THE OTHER SIDES CANNOT CLAIM TO HAVE VESTED RIGHT IN INJUSTICE BEING DONE, BECAUSE OF NON CONDONATION OF DELAY. THIS LEGAL PROPOSITION IS SUPPORTED BY THE DECISION OF H ONBLE SUPREME COURT IN THE CASE OF COLLECTOR OF LAND OF ACQUISITI ON VS MST KATIJI (SUPRA). FURTHER, THE HONBLE SUPREME COURT IN THE CASE OF N. BALAKRISHNAN VS. M. KRISHNAMUTHY (1998) 7 SSC 123 H ELD THAT RULE OF LIMITATION ARE NOT MEANT TO DESTROY THE RIGHT OF PARTIES, THEY ARE MEANT TO SEE THAT PARTIES DO NOT RESORT TO DILATORY TACTICS, BUT SEEK THEIR REMEDY PROMPTLY. THEREFORE, CONSIDERING THE F ACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO BY FOLLOWING TH E CASE LAWS ITA NO.1839/MUM/2016 ADARSH HEGDE 6 DISCUSSED HEREINABOVE, WE ARE OF THE CONSIDERED VI EW THAT THERE IS A REASONABLE CAUSE FOR NOT FILING APPEAL WITHIN THE TIME LIMIT PROVIDED UNDER THE ACT, AND HENCE, THE DELAY IN FILING OF AP PEAL IS CONDONED AND APPEAL FILED BY THE ASSESSEE IS ADMITTED FOR HE ARING. 6. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE ACTION U/S 132 OF THE I.T.ACT, 1961 WAS CARRIED OUT ON 10/ 07/2009, IN THE CASE OF ALLCARGO GROUP OF COMPANIES AND THE DIRECTO RS, ACCORDINGLY SEARCH WAS CARRIED OUT AT THE RESIDENCE OF THE ASSE SEE. DURING WHICH A SUM OF RS. 18 LACS IN CASH WAS FOUND. IN TH E COURSE OF SEARCH, THE ASSESSEE EXPLAINED THAT SAID SUM OF RS. 18 LACS WAS BELONGING TO HIS BROTHER IN LAW, NAMELY SHRI SANATH KUMAR SHETTY. DURING THE COURSE OF SEARCH, IN ORDER TO ASCERTAIN CORRECTNESS OF CLAIM OF THE ASSESSEE, THE CONCERNED AUTHORIZED OFF ICER HAD TELEPHONIC CONVERSATION WITH THE SHRI SANATH KUMAR SHETTY OBTAINED CONFIRMATION FROM HIM THAT CASH OF RS. 18 LACS FOU ND AT THE RESIDENCE OF ASSESSEE BELONGS TO HIM. THE ASSESSEE ALSO HAD FILED AFFIDAVIT OF MR.SANATH KUMAR SHETTY DATED 30/07/200 9, BEFORE THE ASST. DIT(INV.) UNIT 2(1), MUMBAI, WHICH STATED THA T CASH FOUND IN THE RESIDENCE OF THE ASSESSEE IS BELONG TO THE ASSESSEE . CONSEQUENT TO SEARCH, THE CASE WAS TAKEN UP FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LD. AO, ON THE BASIS OF STATEMENT ITA NO.1839/MUM/2016 ADARSH HEGDE 7 RECORDED FROM THE ASSESSEE, DURING THE COURSE OF SE ARCH COUPLED WITH FURTHER ENQUIRIES CONDUCTED DURING ASSESSMENT PROCEEDINGS CAME TO THE CONCLUSION THAT ALTHOUGH, ASSESSEE CLAI MS THAT CASH SEIZED FROM HIS RESIDENCE BELONGS TO HIS BROTHER IN LAW SHRI SANATH KUMAR SHETTY, BUT, ON PERUSAL OF STATEMENTS GIVEN B Y THE PARTIES ALONG WITH EVIDENCES, IT IS NOTICED THAT THERE IS M AJOR DISCREPANCY BETWEEN THE STAND TAKEN AT THE TIME OF SEARCH AND REASONS GIVEN IN THE AFFIDAVIT OF SHRI SANATH KUMAR SHETTY . THEREF ORE, HE OPINED THAT THE ASSESSEE HAS FAILED TO PROVE WITH NECESSARY EVI DENCES THAT CASH FOUND IN HIS RESIDENCE IS BELONGS TO SANATH KUMAR S HETTY AND ACCORDINGLY, MADE ADDITIONS OF RS. 18 LACS, AS UNAC COUNTED MONEY OF THE ASSESSEE U/S 69A OF THE I.T.ACT, 1961. 7. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A ), THE ASSESSEE REITERATED HIS SUBMISSIONS MADE BEFORE THE AO TO AR GUE THAT IT WAS THE STAND OF THE ASSESSEE RIGHT FROM THE DATE OF SE ARCH TILL COMPLETION OF ASSESSMENT THAT CASH FOUND IN HIS RES IDENCE IS BELONGS TO M/S. S.K.S. GROUP, A PARTNERSHIP FIRM, WHERE HIS BROTHER IN LAW SANATH KUMAR SHETTY IS A PARTNER. THE ASSESS EE, FURTHER STATED THAT IT HAS FURNISHED NECESSARY EVIDENCES BEFORE THE AO, HOWEVER, THE AO DISREGARDED ALL EVIDENCES FILED BY THE ASSESEE ONLY ITA NO.1839/MUM/2016 ADARSH HEGDE 8 FOR THE REASON THAT HE COULD NOT FILED TRAVEL DETAI LS OF EMPLOYEE OF M/S S.K.S. GROUP , SHRI PRASAD SHETTY FROM MANGALO RE TO MUMBAI. THE LD. CIT(A) AFTER CONSIDERING RELEVANT SUBMISSIO NS OF THE ASSESSEE AND ALSO TAKEN NOTE OF PROVISION OF SECTIO N 132(4A) HELD THAT AS PER THE PROVISION OF SECTION 132(4A), A PRE SUMPTION ALWAYS THAT ANY CASH OR UNACCOUNTED MONEY FOUND IN THE POS SESSION OF THE ASSESSEE, THAT SUCH MONEY OR UNACCOUNTED ASSET BEL ONGS TO THE PERSON FROM WHOSE CUSTODY, IT WAS SEIZED, UNTIL SUC H PRESUMPTION WAS REBUTTED WITH NECESSARY EVIDENCES. IN THIS CAS E, ALTHOUGH THE ASSESSEE CLAIMS THAT CASH FOUND DURING THE COURSE O F SEARCH BELONGS TO HIS BROTHER IN LAW SHRI SANATH KUMAR SH ETTY, BUT SUCH CLAIM WAS NOT SUPPORTED BY NECESSARY EVIDENCES. THE REFORE, HE OPINED THAT THERE IS NO ERROR IN THE FINDINGS RECOR DED BY THE AO AND ACCORDINGLY, SUSTAINED ADDITIONS MADE TOWARDS UNEXP LAINED MONEY BEING CASH FOUND DURING THE COURSE OF SEARCH AMOUNT ING TO RS. 18 LACS U/S 69A OF THE I.T.ACT, 1961. THE RELEVANT FI NDINGS OF THE LD. CIT(A) ARE AS UNDER:- 7.0 THE FACTS OF THE CASE, THE STAND TAKEN BY THE A O IN THE ASSESSMENT ORDER AND THE CONTENTIONS OF THE APPELLANT DURING T HE ASSESSMENT PROCEEDINGS AS WELL AS DURING THE APPEAL PROCEEDING S HAVE BEEN CAREFULLY CONSIDERED. 7.1 THE ABOVE FACTS INDICATE THAT THE APPELLANT HAS NOT FULLY EXPLAINED THE SOURCE OF THE CASH SEIZED. THE PRESUMPTION U/S 132(4A) OF THE ACT IS THAT THE CASH BELONGS TO THE PERSON FROM WHOSE CUST ODY IT WAS SEIZED UNTIL REBUTTED OTHERWISE. IN THIS CASE IT IS STATED BY THE APPELLANT THAT THE CASH BELONGS TO M/S SKS GROUP IN WHICH SHRI SANATH KUMAR SHETTY, CO- ITA NO.1839/MUM/2016 ADARSH HEGDE 9 BORTHER OF THE APPELLANT IS A PARTNER AND IN SUPPOR T OF SUCH ASSERTION AFFIDAVIT OF SHRI SANATH KUMAR SHETTY WAS FILED. AS POINTED OUT BY THE AO IN THE ASSESSMENT ORDER, THERE ARE CONTRADICTIONS B ETWEEN WHAT WAS STATED BY THE APPELLANT AT THE TIME OF SEARCH AFTER HIS TELEPHONIC CONVERSATION WITH SHRI SANATH KUMAR SHETTY AND THE AFFIDAVIT LATER FILED BY SHRI SANATH KUMAR SHETTY. DURING THE COURSE OF SEA RCH IT WAS STATED THAT SHRI PRASAD SHETTY EMPLOYEE OF M/S SKS GROUP WAS DI RECTED BY SHRI SANATH KUMAR SHETTY TO MEET THE BUYER AND COLLECT T HE MONEY AND DELIVER IT IN THE RESIDENCE OF THE APPELLANT WHERE AS IN THE AFFIDAVIT IT IS STATED THAT THE BOOKS CASH AVAILABLE IN THE BOOKS O F ACCOUNT OF M/S SKS GROUP WAS SENT TO MUMBAI FOR GIVING TOKEN ADVANCE F OR ACQUISITION OF IMMOVABLE PROPERTY IN MUMBAI AND SINCE THE DEAL DID NOT MATERIALIZE THE APPELLANT WAS REQUESTED TO HOLD THE CASH TILL SHRI SANATH KUMAR SHETTY COMES TO MUMBAI. IN THE BOTH THE STATEMENTS THE AP PELLANT FAILED TO ESTABLISH HIS CLAIM WITH REGARD TO THE ALLEGED TRAN SACTION OR THE PROPERTY DEAL. THE APPELLANT MUST HAVE PRODUCED CONFIRMATION LETTER FROM THE PARTIES CONCERNED OR ANY OTHER EVIDENCE TO PROVE HI S CLAIM. MERE STATEMENT OR AFFIDAVIT WHICH IS NOT SUPPORTED BY EV IDENCE CANNOT BE ACCEPTED. 7.2 FURTHER, THE BUS TICKET EVIDENCING THE PROOF FO R TRAVEL OF SHRI PRASAD SHETTY FROM MANGALORE TO MUMBAI HAS ALSO NOT BEEN P RODUCED. IF THE SAID TRAVEL WAS TRUE, THE APPELLANT COULD HAVE AT LEAST OBTAINED THE CONFIRMATION FROM THE TRAVEL AGENCY PROVING THE TRA VEL ON THE DATE. THE SOURCE OF INCOME FOR THE PARTNERS OF M/S SKS GROUP IS STATED TO BE AGRICULTURAL INCOME WHICH ALSO REQUIRES FURTHER VER IFICATION. THE APPELLANT ALSO DID NOT FURNISH ANY DOCUMENT IN SUPPORT OF THE AGRICULTURAL INCOME FOR THE PARTNERS OF THE FIRM. IF THE CASH IS AVAILABLE IN THE BOOKS OF ACCOUNT OF M/S SKS GROUP WHAT PREVENTED IT FROM ISSUING CHEQUE IN PLACE OF CASH. THERE IS NO NEED TO CARRY SUCH HUGE CASH BY PERSON FOR SUCH LONG DISTANCE WHICH HAS ALSO NOT BEEN PROVED. CASH TRANS ACTIONS ARE SUSPICIOUS AND THE SAME HAS NOT BEEN PROVED. THE AP PELLANTS SUBMISSION THAT THE AO HAS ACCEPTED THE OWNERSHIP O F THE CASH AS THAT OF SHRI SANATH KUMAR SHETTY AND THEREFORE HE CANNOT ADD THE SAME AS THE UNDISCLOSED INCOME OF THE APPELLANT IS CONTRARY TO THE FACTS. THE AO HAS NEVER ACCEPTED THAT THE CASH BELONGS SHRI SANAT H KUMAR SHETTY AND IT IS VERY CLEARLY MENTIONED IN THE ASSESSMENT ORDE R THAT THE CASH BELONGS TO THE APPELLANT AND SINCE HE FAILED TO ESTABLISH T HE SOURCE PROPERLY THE CASH WAS BROUGHT TO TAX AS THE UNDISCLOSED INCOME O F THE APPELLANT. IN VIEW OF THE ABOVE, I HEREBY HOLD THAT THE APPELLANT FAILED TO EXPLAIN THE SOURCE PROPERLY AND THEREFORE AND THEREFORE, THE AD DITIONS MADE BY THE A.O TREATING THE UNEXPLAINED CASH OF RS. 18,00,000/ - AS INCOME OF THE APPELLANT IS HEREBY CONFIRMED. IN THE RESULT, THE APPEAL IS HEREBY DISMISSED. 8. THE LD.AR FOR THE ASSESSEE, AT THE TIME OF HEARI NG, SUBMITTED THAT THE LD. CIT(A) WAS ERRED IN CONFIRMED ADDITION S MADE BY THE AO ITA NO.1839/MUM/2016 ADARSH HEGDE 10 TOWARDS CASH FOUND DURING THE COURSE OF SEARCH U/S 69A OF THE I.T.ACT, 1961, EVEN THOUGH, THE ASSESSEE HAS FILED COMPLETED DETAILS, IN RESPECT OF CASH AND ALSO NECESSARY EVID ENCES, INCLUDING CONFIRMATIONS FROM S.K.S. GROUP ALONG WITH AFFIDAVI T OF SHRI SANATH KUMAR SHETTY, WHERE HE HAD CATEGORICALLY ADMITTED T HAT CASH FOUND IN THE PREMISES OF ASSESSEE BELONGS TO HIM AND SUCH CASH HAS BEEN KEPT IN HIS RESIDENCE FOR THE PURPOSE OF MAKING INV ESTMENT IN IMMOVABLE PROPERTY. THE LD. AR, FURTHER SUBMITTED T HAT IT IS NOT A CASE OF THE AO THAT THE ASSESSEE HAS ADMITTED CASH FOUND DURING THE COURSE OF SEARCH AS HIS UNDISCLOSED INCOME IN S TATEMENT RECORDED U/S. 132(4) AND SUBSEQUENTLY, RETRACTED FR OM HIS STATEMENT. IN THIS CASE, THE ASSESSEE RIGHT FROM THE DATE OF S EARCH TO THE DATE OF ASSESSMENT CATEGORICALLY EXPLAINED THAT CASH FOUND FROM HIS RESIDENCE BELONGS TO SHRI SANATH KUMAR SHETTY AND THE SAME HAS BEEN SUBSTANTIATED WITH NECESSARY EVIDENCES. THE LD . AO AS WELL AS THE LD. CIT(A) WERE IGNORED COMPLETE EVIDENCES FILE D BY THE ASSESSEE AND MADE ADDITIONS ONLY ON THE BASIS OF N ON PRODUCTION OF TRAVEL DETAILS OF EMPLOYEE OF SHRI SANATH KUMAR SH ETTY. 9. THE LD. DR, ON THE OTHER HAND, STRONGLY SUPPORTI NG ORDER OF THE LD.CIT(A) SUBMITTED THAT WHEN ANY CASH, JEWELLERY O R OTHER VALUABLE ARTICLES IS FOUND IN THE POSSESSION OR CONTROL OF A NY PERSON IN THE ITA NO.1839/MUM/2016 ADARSH HEGDE 11 COURSE OF SEARCH, IT IS PRESUMED THAT SUCH MONEY, B ULLION OR OTHER DOCUMENTS BELONGS TO SUCH PERSON, UNLESS SUCH PERSO N PROVES THAT MONEY OR OTHER ASSETS FOUND IN THE POSSESSION IS NO T BELONGS TO HIM. THE LD. DR FURTHER SUBMITTED THAT PROVISION OF SECT ION 292C IS VERY CLEAR, AS PER WHICH, UNLESS THE ASSESSEE DEMONSTRAT E WITH EVIDENCES THAT SUCH ASSETS FOUND IN HIS POSSESSION ARE NOT BELONGINGS TO HIM, IT IS PRESUMED THAT ASSETS OR OT HER BOOKS OF ACCOUNTS FOUND IN HIS POSSESSION IS BELONGS HIM AND CONTENTS OF SUCH BOOKS OF ACCOUNTS IS CORRECT. THE LD. DR FURTH ER REFERRING TO PROVISION OF SECTION 110 OF THE INDIAN EVIDENCE ACT , 1872 SUBMITTED THAT BURDEN OF PROOF AS TO OWNERSHIP IS LIES ON THE ASSESSE, AND THE QUESTION IS WHETHER, ANY PERSON IS OWNER OF ANYTHIN G OF WHICH, HE IS SHOWN TO BE IN POSSESSION, THE BURDEN OF PROVING TH AT HE IS NOT THE OWNER IS ON THE PERSON WHO AFFIRMS THAT HE IS NOT THE OWNER. IN THIS CASE, ALTHOUGH THE ASSESSEE CLAIMS TO HAVE FILED NE CESSARY EVIDENCES TO PROVE THAT CASH FOUND DURING THE COURS E OF SEARCH BELONGS TO HIS BROTHER IN LAW, BUT TO JUSTIFY HIS S TAND, NO EVIDENCE HAS BEEN FILED INCLUDING TRAVEL DETAILS OF MR.PRASAD S HETTY, WHO IS CLAIMS TO HAVE BRING MONEY FROM MANGALORE TO MUMBAI. THE L D. CIT(A) AFTER APPRAISING ALL FACTS RIGHTLY CAME TO THE CONC LUSION THAT THE AO WAS RIGHT IN MAKING ADDITIONS TOWARDS CASH FOUND DU RING THE COURSE ITA NO.1839/MUM/2016 ADARSH HEGDE 12 OF SEARCH U/S. 69A OF THE I.T.ACT, 1961, AND HIS OR DER SHOULD BE UPHELD. 10. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. THE AO HAS MADE ADDITIONS TOWARDS CASH FOUND DURING THE COURSE OF SEARCH FROM THE RESIDENCE OF ASSESSEE FOR RS. 18 LACS, ON THE GROUND THAT THE ASSESSEE FAILS TO SUBSTANTIATE ITS CLAIM THAT SUCH CASH WAS BELONGS TO HIS BROTHER IN LAW MR.SANATH K UMAR SHETTY. THE LD. AO HAS GIVEN HIS OWN REASONS TO COME TO THE CONCLUSION THAT ALTHOUGH, ASSESSEE CLAIMS THAT THE MONEY WAS B ROUGHT FROM MANGALORE TO MUMBAI FOR THE PURPOSE OF INVESTMENT I N IMMOVABLE PROPERTY, BUT NO EVIDENCE HAS BEEN FILED INCLUDING TRAVEL DETAILS OF MR. PRASAD SHETTY, WHO CLAIMS TO HAVE DELIVERED SAI D AMOUNT TO THE ASSESEE AT HIS RESIDENCE FOR SAFE CUSTODY. IT IS T HE CLAIM OF THE ASSESSEE THAT CASH FOUND DURING THE COURSE OF SEARC H WAS BELONGS TO HIS M/S. S.K.S. GROUP A PARTNERSHIP FIRM WHERE, HIS BROTHER IN LAW MR. SANATH KUMAR SHETTY WAS ONE OF THE PARTNER. THE ASSESSEE HAD ALSO EXPLAINED REASONS FOR KEEPING SAID CASH IN HI S PREMISES. AS PER THE ASSESSEE, MR.SANATH KUMAR SHETTY SENT A SUM OF RS. 18 LACS THROUGH HIS EMPLOYEE MR. PRASAD SHETTY FOR THE PURPOSE OF INVESTMENT IN IMMOVABLE PROPERTY IN MUMBAI AND SUCH CASH HAS ITA NO.1839/MUM/2016 ADARSH HEGDE 13 BEEN KEPT IN HIS RESIDENCE FOR SAFE CUSTODY. THIS F ACT HAS BEEN SUPPORTED BY NECESSARY EVIDENCES INCLUDING CONFIRMA TIONS FROM MR. SANTH KUMAR SHETTY ALONG WITH SWORN AFFIDAVIT DATE D 30/07/2009, WHERE HE HAD CATEGORICALLY ADMITTED TO HAVE DELIVE RED CASH TO THE ASSESSEE IN MUMBAI. 11. HAVING HEARD AND CONSIDERED MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS TAKEN ONE STAND, RIGHT FROM BEGINN ING FROM THE DATE OF SEARCH TO TILL DATE OF ASSESSMENT THAT CASH FOUND DURING THE COURSE OF SEARCH IN HIS RESIDENCE BELONGS TO MR. SA NATH KUMAR SHETTY. WE, FURTHER NOTED THAT THE ASSESSEE HAS SUB STANTIATED ITS CLAIM BY FILING CONFIRMATION ALONG WITH AFFIDAVIT O F MR. SANATH KUMAR SHETTY. THESE FACTS WERE NOT DISPUTED BY THE AO, AS WELL AS THE LD. CIT(A). THE AO MADE ADDITIONS TOWARDS CASH FOUND DU RING THE COURSE OF SEARCH ONLY ON THE GROUND THAT ALTHOUGH, ASSESSEE CLAIMS THAT CASH FOUND IN HIS RESIDENCE BELONGS TO MR. SAN ATH KUMAR SHETTY, BUT THERE IS A MAJOR DISCREPANCY BETWEEN TH E STAND TAKEN, AT THE TIME OF SEARCH, WHILE RECORDING STATEMENT U/S 1 32(4) AND AT THE TIME OF FILING OF AFFIDAVIT OF MR.SANATH KUMAR SH ETTY. NO DOUBT THERE IS DIFFERENCE IN EXPLANATIONS OFFERED BY THE ASSESS EE , AT THE TIME OF SEARCH, IN RESPECT OF CASH FOUND IN HIS PREMISES, A S PER WHICH CASH BELONGS TO MR. SANATH KUMAR SHETTY, HOWEVER SAID CA SH HAS BEEN ITA NO.1839/MUM/2016 ADARSH HEGDE 14 COLLECTED FROM ONE OF THE BUYER FROM MUMBAI AND KEP T IN HIS RESIDENCE. WHEREAS, AT THE TIME OF CONFIRMATION FIL ED ALONG WITH AFFIDAVIT, IT WAS EXPLAINED THAT SAID CASH HAS BEEN BROUGHT FROM MANGALORE THROUGH ONE OF HIS EMPLOYEE SHRI PRASAD S HETTY FOR THE PURPOSE OF PURCHASE OF IMMOVABLE PROPERTY IN MUMBAI AND THE SAME HAS BEEN HANDOVER TO THE ASSESSEE FOR SAFE K EEPING. ON PERUSAL OF STATEMENT RECORDED , DURING THE COURSE O F SEARCH AND CONTENTS OF AFFIDAVIT FILED BY MR.SANATH KUMAR SHET TY, WE FIND THAT THERE IS NO DIFFERENCE IN STAND TAKEN BY THE ASSESS EE, IN RESPECT OF SAID CASH. THE ASSESSEE ALL ALONG CLAIMS THAT SAID CASH BELONGS TO HIS BROTHER IN LAW SHRI. SANATH KUMAR SHETTY AND TH IS FACT WAS EVEN CONFIRMED BY HIS BROTHER IN LAW MR. SANATH KUMAR SH ETTY. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT MERELY FOR THE R EASON THAT THERE IS A DIFFERENCE IN STATEMENT GIVEN AT THE TIME OF SEAR CH AND STATEMENT GIVEN IN SWORN AFFIDAVIT REGARDING SOURCE OF CASH I N THE HANDS OF MR. SANATH KUMAR SHETTY, NO ADVERSE INFERENCE COULD BE DRAWN AGAINST THE ASSESSEE THAT SAID CASH BELONGS TO THE ASSESSEE AND ASSESSEE IS UNABLE TO EXPLAIN SOURCE OF CASH FOUND DURING TH E COURSE OF SEARCH. WE FURTHER NOTED THAT IT IS NOT A CASE OF THE AO THAT THERE IS A DIFFERENCE BETWEEN STATEMENT GIVEN DURING THE COU RSE OF SEARCH AND EXPLANATION FURNISHED DURING THE COURSE OF ASSE SSMENT PROCEEDINGS. THE ASSESSEE HAS RIGHT FROM THE DATE O F SEARCH TO TILL ITA NO.1839/MUM/2016 ADARSH HEGDE 15 DATE OF ASSESSMENT HAD TAKEN ONE STAND, IN RESPECT OF CASH FOUND FROM HIS RESIDENCE. THEREFORE, WE ARE CONSIDERED VI EW THAT THE LD.AO, AS WELL AS LD.CIT(A) ERRED IN SUSTAINED ADDI TIONS TOWARDS CASH FOUND, DURING THE COURSE OF SEARCH U/S 69A OF THE I.T.ACT, 1961. HENCE, WE SET ASIDE ORDER OF THE LD. CIT(A) AND DIR ECT THE AO TO DELETE THE ADDITIONS MADE TOWARDS CASH FOUND DURING THE COURSE OF SEARCH AS UNEXPLAINED MONEY U/S 69A OF THE I.T.ACT, 1961. 12. IN THE RESULT, APPEAL FILED BY THE ASSESSE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09/08/20 19 SD/- (RAM LAL NEGI) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 09/08/2019 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//