LATE SRICHAND LACHHMANDAS KIMTANI,ULHASNAGAR V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 4, THANE

ITA 6254/MUM/2024

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The case involves the late Srichand Lachhmandas Kimtani, represented by his legal heir Asha S. Kimtani, who appealed against the order of the CIT(A), Pune-11, confirming the addition of Rs. 4,78,120 to the assessee's income for the Assessment Year 2018-19. This addition was initially made by the ACIT, Central Circle 4, Thane, following a search and seizure operation under section 132(1) of the Income-tax Act, 1961, which uncovered cash at the assessee's residence. The assessee contested that the cash was from legitimate sources, including personal savings and gifts, and was recorded in the books of accounts of various partnership firms and family members. The CIT(A) partially accepted the assessee's explanation, acknowledging that Rs.2,96,614 of the cash was explained, but upheld the addition of Rs.1,81,506 as unexplained. The Tribunal's decision aligned with the CIT(A)'s findings, partly allowing the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397080 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Assessment Year: 2018-2019
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “K(SMC)” BENCH MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 6254/MUM/2024 Assessment Year: 2018-19 Late Srichand Lachhmandas Kimtani Legal Heir – Asha S. Kimtani Office no. 1 kala place, Ground Floor Nr. Madhuban road, Ulhasnagar 421001. (PAN: ABHPK4115G) Vs. Deputy Commissioner of Income Tax, Thane-400602. (Appellant) (Respondent) Present for: Assessee : Ms. Manisha Ghind, CA Revenue : Shri. Kiran Unavekar, Sr. DR Date of Hearing : 20.03.2025 Date of Pronouncement : 27.05.2025 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of Ld. CIT(A), Pune-11, vide order no. ITBA/APL/S/250/2024-25/1069266577(1) dated 30.09.2024, passed against the assessment order by ACIT, Central Circle 4, Thane, u/s. 143(3) of the Income-tax Act, 1961 2 ITA No. 6254/Mum/2024 Late Srichand Lachhmandas Kimtani, A.Y. 2018-19 (hereinafter referred to as the “Act”), dated 23.12.2019 for Assessment Year 2018-19. 2. Grounds taken by the assessee are reproduced as under: “1. The Hon'ble CIT(A) has erred in passing an order confirming the addition made by the Ld. ACIT Central Circle-4, Thane without appreciating the facts of the case as well as law. Without prejudice to the above, appellant submits that: 2. The Hon'ble CIT(A) has erred in confirming addition of Rs. 4,78,120/- without appreciating the fact that the evidences produced before the Ld. Assessing Officer in the course of Remand proceedings & before Hon'ble CIT(A) explaining the source of cash was not only part of audited books of accounts of the partnership firms, but were infact duly accepted by the office of the very Ld. DCIT Central Circle-4 Thane, while completing the assessments in the cases of respective family members&/or partnership firms. 3. The Hon'ble CIT(A) has failed in appreciating the fact placed before him vide submission dated 31/08/2024 to the effect that even in the remand report the Ld. Assessing officer had not given any adverse findings in regard to the cash being of partnership firm and family members, not only whose books of accounts were audited but also the assessment in case of individuals (family members) and partnership firms were completed u/s 143(3) of the l.t Act, 1961. 4. The appellant craves leave to add, amend, alter and/or vary any of the grounds at the time or before the hearing of this appeal. 5. The appellant therefore prays that addition made without appreciating the facts of the case and being not in accordance with the provisions of law may please be deleted & obliged.” 3. Assessee, late Shri. Srichand Lachhmandas Kimtani being represented by his legal heir Smt. Asha Srichand Kimtani an individual being partner in various firms and having income from other sources belonged to Konark Group & Regency Group of cases which group was engaged in diversified businesses such as Banking, Octroi and toll collection, Steel Industries, Development & Construction of Commercial and Housing Projects, Government Civil Contracts, Steel Rolling Mill, along with Skywalk Construction, etc. Assessee filed his return of income reporting an income at Rs.43,43,540/-. Assessment in this 3 ITA No. 6254/Mum/2024 Late Srichand Lachhmandas Kimtani, A.Y. 2018-19 respect was completed by making addition of Rs.4,78,120/- u/s. 69A of the Act, representing cash found at assessee's residential premises during the course of search action, chargeable to tax u/s.115BBE(1)(b) of the Act. 3.1. Search & seizure actions u/s. 132(1) of the Act was carried out in the case of Konark Group of cases on 28.01.2018, as a result of which residential premises of the assessee was also covered. During the course of assessment proceedings, it was noticed that in the course of search action, cash amounting to Rs.4,78,120/- was found from the residential premises of the assessee and accordingly, assessee was asked to explain the source of the said sum. As no explanation was filed by the assessee, ld. Assessing Officer completed the assessment by adding the said sum of Rs.4,78,120/- to assessee's returned income. According to the assessee, it was not correct on the part of ld. Assessing officer to say that assessee had not filed any explanation in regard to the source of cash found which according to him was submitted across the table in the course of assessment proceedings itself vide AR's letter dated 10.11.2019. However, ld. Assessing officer completed the assessment by treating the amount of Rs.4,78,120/- as unexplained money liable to tax u/s 69A r.w.s 115BBE of the Act. Aggrieved, assessee went in appeal before the ld. CIT(A). 4. Before ld. CIT(A), assessee made detailed submissions dated 11.11.2022 placing the facts on record. Thereafter, ld. CIT(A) called for a remand report from the office of ACIT Central Cirle-4, Thane. Ld. Assessing Officer submitted his remand report dated 05.08.2024 wherein he has acknowledged the assessee's submission. From the finding of Ld. Assessing Officer as given in remand report, he did not 4 ITA No. 6254/Mum/2024 Late Srichand Lachhmandas Kimtani, A.Y. 2018-19 accept the assessee's contention of having filed submission dated 10.11.2019 in the course of original assessment proceedings, however did not give any adverse finding in respect of the evidences submitted by the assessee to substantiate the source of said cash being available with him. Assessee filed his comments in detailed submission dated 31.08.2024. However, ld. CIT(A) not finding favour with the submissions of the assessee, confirmed the addition made ld. Assessing officer, inspite of ld. CIT(A) himself having observed in para 9 of the order that assessee has not been able to substantiate the source of cash to the extent of Rs.1,81,506/- (Rs.4,78,120 – Rs.2,96,614) (i.e out of total amount of Rs.4,78,120/-) which in other words means that source to the extent of Rs. 2,96,614/- stood duly explained leaving behind a sum of Rs 1,81,506/-. However, while concluding the order in para 13, he confirmed the addition of Rs.4,78,120/- which was made by the Ld. Assessing Officer. 5. We have perused para-8 from the order of ld. CIT(A), wherein it is stated that assessee explained about the cash which is out of personal savings, from cash gifts received by family members and out of bank withdrawals. According to the assessee, cash is covered in his books of accounts and in his family members' books of accounts. Assessee had submitted that cash in hand was in the names of his family members as well as partnership firms, for which details were provided as tabulated below. 5 ITA No. 6254/Mum/2024 Late Srichand Lachhmandas Kimtani, A.Y. 2018-19 Sr.No. Name of the firm/person Cash in hand 1. M/s. Fourway Reality Rs. 72,745/- 2. M/s. Vasant Builders & Developers Rs.21,491/- 3. M/s. Mannas Developers Rs.49,743/- 4. M/s. Barddhaman Builders & Developers Rs.287/- 5. Shrichand L. Kimtani Rs.1,583/- 6. Shrichand L. Kimtani HUF Rs.8,156/- 7. Ms. Palak Vinod Kimtani Rs. 16,500/- 8. Ms. Aditi Sanjay Kimtani Rs.22,650/- 9. Sanjay S. Kimtani HUF Rs.5,860/- 10.Vinod S. Kimtani HUF Rs.11,118/- 11.Sanjay S. Kimtani Rs. 19,118/- 12.Vinod S. Kimtani Rs.44,230/- 13.Ms. Asha Shrichand Kimtani Rs.23,133/- 14.Total Rs.2,96,614/- 5.1. From the above details, ld. CIT(A) in para- 9 noted that assessee has furnished explanation for an amount of Rs.2,96,614/- only, out of total addition of Rs 4,78,120/-. Thus, he upheld the addition for the balance amount of Rs 1,81,506/- which remained unexplained. On these facts, ld. Counsel for the assessee submitted before us to sustain the addition of Rs.1,81,506/- which remained to be explained, as noted by ld. CIT(A) in para- 9 of his order. Ld. Counsel also pointed out that observation of ld. Assessing Officer in para- 6 is incorrect that no submissions were made by the assessee. According to him, the correct fact is that assessee had made a submission dated 10.11.2019 which has been referred in the order of ld. CIT(A) in para- 6 at page 3 and therefore, ought to have been considered while adjudicating upon the 6 ITA No. 6254/Mum/2024 Late Srichand Lachhmandas Kimtani, A.Y. 2018-19 matter. In support of the submissions made by the assessee, ld. Counsel referred to question 18 of the statement recorded of the assessee during the course of search which is reproduced in para- 6 at page 4 in the order of ld. CIT(A). While answering to question 18, to confirm and explain the source of cash, assessee had submitted that cash found is out of accumulation of personal savings, cash gift received by family members on various occasions, out of bank withdrawal to meet various expenses such as household expenses, medical emergency, etc. He, further submitted that the cash so found of Rs 4,78,120/- is covered in his books of accounts and the books of accounts of his family members. Ld. Counsel thus pointed out that explanation furnished before the authorities below was in consonance with the statement given during the course of search. 6. Per contra, ld. Sr. DR. placed reliance on the orders of the authorities below. He also referred to the statement recorded of the assessee in the course of search and pointed out that the cash in hand details had not been explained adequately and therefore addition ought to be sustained. 7. We have heard both the parties and perused the material on record. From the perusal of the order of ld. CIT(A), he has acknowledged the furnishing of explanation regarding source of cash amounting to Rs 2,96,614/-, out of Rs 4,78,120/-. For the balance, he has upheld the addition amounting to Rs.1,81,506/- for which no explanation was furnished. Ld. Counsel for the assessee has submitted to accept the addition of Rs. 1,81,506/- as upheld by ld. CIT(A). Considering the facts on record and the submissions so made and perusing the orders of authorities below, we accordingly upheld the addition of Rs.1,81,506/- 7 ITA No. 6254/Mum/2024 Late Srichand Lachhmandas Kimtani, A.Y. 2018-19 out of the total addition of Rs. 4,78,120/- made by the ld. Assessing Officer. Accordingly, grounds raised by the assessee in this respect are partly allowed. 8. In the result, appeal of the assessee is partly allowed. Order is pronounced in the open court on 27th May, 2025 Sd/- Sd/- (Pawan Singh) (Girish Agrawal) Judicial Member Accountant Member Dated: 27th May, 2025 MP, Sr.P.S. Copy to : 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 5 Guard File CIT BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai "