Shri Narsingbhai Dahyabhai Patel, Mehsana V. ITO, Patan Ward-5, Mehsana

ITSSA 69/AHD/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4912 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-03-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 06-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure; Block assessment
• Section: 131; 143(3); 153A; 69A

Judgement Text

, ‘A’ । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD (through web-based video conferencing platform) ] ] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT AND MS. MADHUMITA ROY, JUDICIAL MEMBER IT(SS)A No. 69/Ahd/2018 Assessment Year : 2014-15 Shri Narsingbhai Dahyabhai Patel, Village Kolwada, Taluka Vijapur, Rakhial, Mehsana-382870 PAN : AUZPP 8344 H Vs Income-Tax Officer, Patan Ward-5, Mehsana / (Appellant) / (Respondent) Assessee by : None Revenue by : Shri Vijay Kumar Jaiswal, CIT-DR /Date of Hearing : 28/03/2022 /Date of Pr onouncement: 30/03/2022 ेश/O R D E R PER P.M. JAGTAP, VICE-PRESIDENT : This appeal filed by the assessee is directed against the order of learned Commissioner of Income-Tax (Appeals), Gandhinagar, Ahmedabad (“CIT(A)” in short) dated 08.01.2018 and the solitary issue involved therein relates to the addition of Rs.20,21,000/- made by the Assessing Officer and confirmed by the learned CIT(A) on account of cash found from the possession of the assessee by treating the same as unexplained income under Section 69A of the Income-tax Act, 1961 (“the Act” in short). 2. The assessee, in the present case, is an individual who was found by Police Authorities of Kota, Rajasthan with possession of cash of Rs.20.21 lacs. Although he initially denied the ownership of the said cash by stating that the same was belonging to third party, he could not produce any evidence to corroborate his stand. The said cash, therefore, was seized under Section 132(1) of the Act on 13.02.2014 and a notice under Section 153A of the Act was issued by the Assessing Officer to the assessee on IT(SS)A No. 69/Ahd/2018 Shri Narsingbhai Dahyabhai Patel Vs. ITO AY : 2014-15 2 01.02.2016. In response to the said notice, the return of income was filed by the assessee on 01.03.2016 for the year under consideration, i.e. AY 2014-15, declaring total income of Rs.1,70,490/-. During the course of assessment proceedings, the statement of the assessee was recorded by the Assessing Officer under Section 131 of the Act, wherein he admitted that the cash of Rs.20,21,000/- found from his possession was belonging to him. As regards the source of the said cash, the assessee explained that the same to the extent of Rs.10,10,000/- represents his cash savings while the balance cash of Rs.10,00,000/- was his additional income for Assessment Year 2014-15. Since this explanation offered by the assessee was not supported by any documentary evidence, he was called upon by the Assessing Officer to offer his explanation in this matter. In reply, a letter dated 21.03.2016 was filed by the assessee offering his explanation in writing as under:- “In the notice it was mentioned that you propose to make addition of Rs.20.00 lacs seized u/s. 69A in the assessment of the assessee. In that connection, we would like to mention as under. The facts of the case is that the assessee is engaged in the business of work of Angadia firm since last many years. Alongwith that he was doing his personal work also like an Angadia. Since he has started working for land dealings also he was earning some margin in that also. He is also having agricultural income. After meeting his household and other personal expenses he is having Net Saving and the same was given in his village to various people as advances like call money. In the Financial Year 2013-14, he has good income from land dealing brokerage. So he decided to buy office at Kota and work as Angadia. In that connection he has gone to Kota to buy the office. The amount was given to the Angadiaya firm Hasmukhkumar Kantilal Ahmedabad and he has to take from Kota. Since he could not materialize the deal: the manager of the branch of angadiya firm Shri Vipul Patel gave him the amount. The same amount was carried by the assessee. In that connection, the police of Kota intercepted the bus in which he was travelling to Ahmedabad and after tough interrogation, the cash was handed over to Income Tax Investigation Wing Kota. In that time the statement of the assessee was recorded in which he mentioned that the money belongs to the firm and not to him and he was to give them to the Angadiya firm at Ahmedabad. The assessee was so much shocked and afraid because of interrogation of the police and the investigation wing of income tax that he IT(SS)A No. 69/Ahd/2018 Shri Narsingbhai Dahyabhai Patel Vs. ITO AY : 2014-15 3 did not own the money. This was because of fear of arrest and other consequences as the assessee was unaware of the law also. So, instead of owing the amount he said the other thing. Thereafter the proceedings u/s. 153A was initiated. The assessee at that time also did not own the money. But thereafter, after discussion he said that the said amount of Rs.20.00 lacs belonged to him. He also explained that out of the amount of Rs.20.00 lacs Rs. 10.00 lacs were with him as his Capital which was build up out of his old savings after meeting his expences. The rest amount of Rs. 10.21 lacs was out of his income from land dealing brokerage and other income during the year. It is also submitted that because of fear of arrest and other consequences the assessee did not tell the truth to the ADIT and also did not include the income while filing the ITR u/s. 153A. But now he has realized and is prepared to pay tax due on Rs.10.21 lacs and to buy peace of mind and to avoid litigation with the department. So, we submit that the amount of Rs. 10.21 lacs being the income earned from other sources like land dealing brokerage and not offered for taxation in the ITR filed u/s. 153A be taken as Income. Further it is also submitted that since the assessee has offered the income to buy peace of mind and to avoid litigation, minimum possible penalty be imposed. During the time of giving statement in your office also, the assessee has mentioned the same above facts. Further it is also submitted that the amount of Rs. 20.21 lacs seized at Kota is still tying in P.O. account of the assessee. So, we also request to release the amount in the name of the assessee after retaining the tax and penalty amount. We are also attaching the chart showing the manner of earning of income of the assessee in the past and savings made there from which was to be utilized for purchase of office at Kota and which was seized. So, we request you not to make addition of that amount in block assessment proceedings. Now we would like to reproduce the provisions of Section 69A which is under: "where in any Financial Year the assessee is found to be the owner of any money, bullion, jewellary or other valuable article and such money, bullion, jewellery or other valuable article is nor recorded I the books of the account, if any, maintained by him for any source of income and the assessee offers no, explanation about the nature and source of acquisition of the money, bullion, jewellary or other valuable article, or the explanation offered by him is not in the opinion of the Officer, satisfactory, the money and the value of the bullion, jewellary or other article may be deemed to be the income of the assessee for such financial year." IT(SS)A No. 69/Ahd/2018 Shri Narsingbhai Dahyabhai Patel Vs. ITO AY : 2014-15 4 From the above it is clear that the amount that can be added will be the amount which the assessee cannot offer the proper source of earning. The assessee has offered the source of income which is from Angadia Firm and also from Agricultural Income. So, the amount to that extent cannot be added. The assessee has said the same thing to the ADIT Kota and also during the statement in your office. So, we request you to accept the said income as explained as the nature and source of the income gets explained satisfactorily." 3. In the absence of any documentary evidence furnished by the assessee to support and substantiate his explanation, the Assessing Officer rejected the same and proceeded to make the addition of Rs.20.21 lacs under Section 69A of the Act by treating the cash found from the possession of the assessee as unexplained in the assessment completed under Section 143(3) read with Section 153A of the Act vide order dated 29.03.2016. 4. Against the order passed by the Assessing Officer under Section 143(3) read with Section 153A of the Act, an appeal was filed by the assessee before the learned CIT(A) and the submission made before the Assessing Officer during the course of assessment proceedings was reiterated on behalf of the assessee before the learned CIT(A) in support of his case on the issue relating to cash found from his possession which was treated by the Assessing Officer as unexplained. The learned CIT(A) did not find merit in the said submission and proceeded to confirm the addition of Rs.20.21 lacs made by the Assessing Officer by treating the cash found from the possession of the assessee as unexplained. 5. Aggrieved by the order of the learned CIT(A), the assessee has preferred this appeal before the Tribunal. 6. At the time of hearing fixed in this case today, none has appeared on behalf of the assessee. It is observed that there was a similar non- IT(SS)A No. 69/Ahd/2018 Shri Narsingbhai Dahyabhai Patel Vs. ITO AY : 2014-15 5 compliance on the part of the assessee when this appeal was earlier fixed for hearing on 09.07.2021, 26.08.2021 and 03.02.2022. This appeal of the assessee is, therefore, being disposed of ex-parte qua the assessee after hearing the arguments of the learned DR and perusing the relevant material available on record. As submitted by the learned DR, the source of cash found from the possession of the assessee was not explained by the assessee satisfactorily and whatever explanation offered by the assessee regarding the source of the said cash was not supported by any documentary evidence. In this regard, he has strongly relied on the findings/observations recorded by the learned CIT(A) in paragraph 4.2 of his impugned order which read as under:- “4.2 I have considered the facts of the case, order of the AO and submission made by the appellant. The AO made the addition due to the fact that the appellant could not offer any explanation for the cash of Rs.20,21,000/- seized from him. The appellant has contended that this amount was not unexplained but was the amount of his past savings from his work as an angadia and from land dealing brokerage income. During the appellate proceedings, the appellant, has furnished a copy of a 7/12 abstract and two bills in relation with agriculture produce. However, these documents do not explain the cash of Rs.20,21,000/- found in the possession of the appellant. No evidence has been furnished in respect of the angadia income or the brokerage income he claims to have been engaged in. The appellant has stated further, that section 69A cannot be applied to his case as he has offered an explanation for the money found on him. However, this argument of the appellant is misplaced. The appellant does not simply have to offer an explanation, this explanation also needs to be satisfactory. In this case, the explanation of the appellant is not supported by any documentary evidences and corroborating submissions. Thus, the same remain unexplained and the addition of Rs.20,21,000/- made by the AO is confirmed. Ground of appeal is dismissed.” 7. As is clearly evident from the findings/observations recorded by the learned CIT(A) in his impugned order, no documentary evidence was filed by the assessee to support and substantiate his explanation regarding the IT(SS)A No. 69/Ahd/2018 Shri Narsingbhai Dahyabhai Patel Vs. ITO AY : 2014-15 6 source of cash found from his possession and there is nothing brought on record by the assessee to rebut or controvert the findings specifically recorded by the learned CIT(A) in his impugned order in this regard in spite of proper and sufficient opportunity offered to him. We, therefore, find no justifiable reason to interfere with the order of the learned CIT(A) on this issue and upholding the same, we dismiss the appeal filed by the assessee. 8. In the result, the appeal of the assessee is dismissed. Order pronounced in the open Court on 30 th March, 2022 at Ahmedabad. Sd/- Sd/- (MADHUMITA ROY) (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad, Dated 30/03/2022 *Bt /Copy of the Order forwarded to : 1. ! / The Appellant 2. "# ! / The Respondent. 3. $%$&' # # ( / Concerned CIT 4. # # ( ) (/ The CIT(A)- 5. + , # &' , # # &' /DR,ITAT, Ahmedabad, 6. , ./ 0 /Guard file. / BY ORDER, TRUE COPY ह # $ज (Asstt. Registrar) # # &' ITAT, Ahmedabad 1. Date of dictation- ...28.03.2022 – four pages dictation pad attached...... 2. Date on which the typed draft is placed before the Dictating Member ...28.03.2022 ............ Other member....28.03.2022 .......... 3. Date on which the approved draft comes to the Sr.P.S./P.S. - ......28.03.2022............ 4. Date on which the fair order is placed before the Dictating Member for Pronouncement ...30.03.2022.. 5. Date on which the file goes to the Bench Clerk...30.03.2022............. 6. Date on which the file goes to the Head Clerk.................................. 7. The date on which the file goes to the Assistant Registrar for signature on the order..................... 8. Date of Despatch of the Order..................