LAXMI NARAYAN AGARWAL,UTTAR PRADESH V. DCIT CENTRAL CIRCLE-29, DELHI

ITA 1121/DEL/2024

AI Insights

The case involves an appeal by Laxmi Narayan Agarwal against an ex-parte order of the Commissioner of Income Tax (Appeals)-30, New Delhi, which confirmed the addition of unexplained cash amounting to Rs.5,89,170 found during a search and seizure operation under section 132(2) of the Income Tax Act, 1961. The search was conducted on 14.10.2020 at the premises of Manoj Kumar Singh & Associates, which also covered the premises of the assessee. The Assessing Officer made additions under section 69A of the Act for unexplained cash and jewellery. The CIT(A) deleted the addition regarding jewellery but upheld the cash addition. The assessee argued that the cash belonged to his elderly parents, who were agriculturists, and was kept in his locker for safekeeping. The Tribunal, after examining the revenue records and considering the customary practice of women in Indian society to keep cash savings, partly allowed the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298832 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2021-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH TIWARI
• Assessee Lawyers: CHINU BHASIN; CHARTERED ACCOUNTANT
• Keywords: Corroborative evidences
• Section: 69A; 73

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.1121/िदʟी/2024 (िन.व. 2021-22) ITA No.1121/DEL/2024 (A.Y.2021-22) Laxmi Narayan Agarwal, 807, Skttech Magadh, Sector-3, Ghaziabad, I.E Sahibabad, Uttar Pradesh 201010 PAN: ADQPA-5790-G ...... अपीलाथᱮ/Appellant बनाम Vs. Deputy Commissioner of Income Tax, Central Circle-29, Ara Centre, Jhandewalan Extension New Delhi 110055 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Ms. Chinu Bhasin, Chartered Accountant ŮितवादीȪारा/Respondent by : Shri Rajesh Tiwari, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 10.12.2024 घोषणा कᳱ ितिथ/ Date of pronouncement : : 31.01.2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against an ex-parte order of Commissioner of Income Tax (Appeals)-30, New Delhi (hereinafter referred to as 'the CIT(A)') dated 30.01.2024, for assessment year 2021-22. 2. Ms. Chinu Bhasin, appearing on behalf of the assessee submits that a search & seizure action u/s. 132(2) of the Income Tax Act, 1961(hereinafter referred to as 'the Act') was carried out on 14.10.2020 in the case of Manoj Kumar Singh & his Associates. During the course of search premises/locker of the assesee 2 ITA No. 1121/Del/2024(AY 2021-22) was also covered. From locker/premises of the assessee, cash Rs.5,89,170/- and jewellery was found. The Assessing Officer (AO) made addition of Rs.10,67,035/- u/s. 69A of the Act in respect of unexplained source for acquiring jewellery amounting to Rs.10,67,035/- and unexplained cash Rs.5,89,170/-. The assessee carried the additions in appeal before the CIT(A) and got partial relief. The addition made on account of jewellery was deleted by the CIT(A). However, addition with respect of cash found was upheld. The AR of the assessee submitted that cash seized belongs to parents of the assessee who were staying with them. The father of the assessee is an agriculturist and owned land in village Kaimawali, Tehsil Iglas, District Aligarh. The CIT(A) has disbelieved that parents of the assessee were residing with the assessee. He submitted that father of the assessee is 80 years of age and mother of the assessee aged 73 years being elderly were keeping their savings including cash and valuable items, jewellery etc. in safe custody of their son (assessee) who is having locker facility in Ghaziabad. The father of the assessee keeps visiting his village as and when need arises to monitor agricultural activities and during harvest season. In the statement of Ms. Renu Agarwal wife of the assessee, specifically stated that her mother in law (that is mother of the assessee) used to stay with them for certain months. The CIT(A) for the purpose of allowing relief qua jewellery of mother kept in the locker of the assessee, accepted mother as part of the family but refuses to considered parents of the assessee as part of the family while adjudicating on cash. The assessee had furnished details of the crops grown on the agricultural land owned by father of the assessee. The parents of the assessee have filed an affidavit wherein they have confirmed that father earns agricultural income and 3 ITA No. 1121/Del/2024(AY 2021-22) stays with his sons in Ghaziabad and they keep cash and valuable items like jewellery in safe custody of the son. The assessee had also placed on record affidavit of one of the neighbors of the assessee confirming the fact that parents of the assessee stay with him for certain months and keeps visiting native village for agricultural activities. Thus, the fact that father of the assessee earns agricultural income and cash amounting to Rs.3.5 to Rs.4 lakhs stand explained with supporting evidences. The part of cash found and seized belongs to the savings of the assessee's mother and wife. The AO and the CIT(A) have failed to controvert the submissions of the assessee. No document was brought on record by the Revenue to prove that the assessee has earned cash seized from undisclosed sources. The assessee has discharged its onus in proving source of cash found at the premises. The AR of the assessee thus, prayed for deleting addition on account of cash Rs.5,89,170/-. 3. Per contra, Rajesh Tiwari representing the department vehemently supported findings of the AO and the CIT(A) and prayed for dismissing appeal of the assessee. The ld. DR submits that the assessee has failed to explain source of cash found from his premises. No documentary evidences were filed by the assessee to support that father of the assessee was earning agricultural income. He thus, prayed for upholding addition. 4. Both sides heard, orders of the authorities below examined. Consequent, to search addition on account of unexplained source for acquiring jewellery amounting to Rs.10,67,035/- and unexplained source of cash Rs.5,89,170/- was made u/s. 69A of the Act. In First Appellate proceedings, the CIT(A) deleted addition with respect to jewellery in toto. However, he confirmed addition of 4 ITA No. 1121/Del/2024(AY 2021-22) Rs.5,89,170/- with respect to cash. Hence, the assessee is in appeal before the Tribunal in respect of addition confirmed by the CIT(A). 5. The contention of the assessee is that part of cash found at the premises/locker of the asseseee belongs to father of the assessee who is an agriculturist and owns agricultural land in village Kaimawali, Tehsil Iglas, District Aligarh. The contention of the assessee is that cash around Rs.3.5 to Rs.4 lakhs is from the agricultural income of father of the assessee and rest of the amount is from savings of wife and mother of the assessee. The assessee in order to substantiate agricultural income of father of the assessee has furnished copy of revenue records giving description of land owned, agricultural activities carried out, etc. at pages 87 to 92 of the paper book. A perusal of revenue records at page 87 and 88 of paper book reveal that father of the assessee is having land measuring 1.47 hectares approximately jointly owned with one Rajender Prasad Agarwal. Further, perusal of revenue records reveal that on the agricultural land Bajra and Wheat crops were cultivated. Thus, it can be safely presumed that father of the assessee was carring out agricultural activities. However, the assessee has not placed on record any documentary evidence to substantiate sale of crop and extent of agricultural income earned by father of the assessee. From examination of revenue records it also emerges that land was not entirely owned by father of the assessee, it was a joint property with one Shri Rajender Prasad Agarwal. Therefore, entire produce from agricultural activities cannot be said to be that of father of assessee. Taking into consideration entire facts of the case, and keeping in view the extent of land owned by father of the assessee, I estimate savings from accumulated agricultural income to the extent of Rs.1.5 lakhs to be 5 ITA No. 1121/Del/2024(AY 2021-22) part of cash found at the time of search. As regard cash savings of mother and wife of the assessee are concerned, although no supporting document have been placed by the assessee, in Indian society it is customary for the ladies to keep cash savings. The combined cash savings of mother and wife of the assessee is estimated at Rs.1,00,000/-. Thus, the assessee gets relief of Rs. 2.5 lakhs with regard to addition of unexplained cash. 6. In the result, appeal of the assessee is partly allowed in the terms aforesaid. Order pronounced in the open court on Friday the 31st day of January, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 31.01.2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "