SUBHASH GUPTA V. DCIT, CENTRAL CIRCLE, DEHRADUN

ITA/12/2023

AI Insights

The case involves an appeal by the assessee against the order of the Income Tax Appellate Tribunal, Dehradun, which pertained to the assessment year 2014-15. A search under Section 132 of the Income Tax Act was conducted on the assessee, leading to the discovery of cash and documents in a locker. The Assessing Officer added Rs. 20,45,000 as unexplained income, which was partially contested by the assessee. The Commissioner of Income Tax (Appeals) and the Tribunal both upheld the addition of Rs. 4,45,000 as unexplained. The High Court dismissed the appeal, agreeing with the lower authorities' findings and noting that the issue was primarily a computational exercise.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 670559 (HC-UTTARAKHAND)
• Appeal Type: Others
• Pronouncement Date: 04-08-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Respondent
• Court: HIGH COURT
• Assessee Lawyers: B D PANDE; AKSHAY PRADHAN
• Keywords: Assessment Order; Income from Business & Profession; Income tax appeal; Search and seizure; Undisclosed income
• Section: 143(3); 142(1); 132; 260A; 292C; 250(6)

Judgement Text

"SL. No Date Office Notes, reports, orders or proceedings or directions and Registrar’s order with Signatures COURT’S OR JUDGES’S ORDERS 04.08.2023 ITA No. 12 of 2023 Hon’ble Vipin Sanghi, C.J. Hon’ble Rakesh Thapliyal, J. 1. Mr. B.D. Pande and Mr. Akshay Pradhan, learned counsels for the appellant. 2. The present Income Tax Appeal has been preferred by the assessee under Section 260A of the Income Tax Act, to assail the order passed by the Income Tax Appellate Tribunal, Dehradun Bench ‘DB’, Dehradun (Tribunal) in ITA No. 131/DDN/2019 : Asstt. Year : 2014-15. 3. A search, under Section 132 of the Income Tax Act was conducted by the Revenue on 21.11.2013, following which a notice, under Section 142(1) of the Act, was issued by the Revenue on 02.12.2014 for the Assessment Year 2014-15. In response to the said notice, the assessee submitted his return of income on 30.03.2015, declaring total income of Rs. 25,23,790/-. The assessee was given a notice, in response whereto, he submitted his explanation. During the course of the assessment proceedings, the assessee submitted a revised computation of income, vide which some undisclosed income has been surrendered. The assessee had shown undisclosed income to the tune of Rs. 3723/-. During the search, cash to the tune of Rs. 20,45,000/- was found in the locker of the assessee, along with a slip, which purported to contain the details of the cash so found. The explanation of the assessee, in relation to the cash found in the locker, was not accepted by the Assessing Officer, who passed the Assessment Order on 29.03.2016 under Section 143(3) of the Income Tax Act, and, consequently, an addition of Rs. 20,45,000/- was made by the Assessing Officer. 4. The assessee, then, preferred an appeal under Section 250(6) of the Income Tax Act before the Commissioner of Income Tax (Appeals) IV, Kanpur. The Commissioner (Appeals), in his order dated 25.04.2019, observed as follows :- “Admittedly, document in the locker itself were found and seized, during search action, evidencing the above explanation of the appellant, which is on record. Further, computation of income for this relevant assessment year disclose the capital gain on sale of old jewellery amounting to Rs. 8,00,000/-. It is settled preposition of law u/s 292C of the Act that seized documents, during search action are deemed to correct and true unless otherwise proved with cogent evidences. Hence, it is evident from the details available on the record that the appellant has explained the source of cash found during the course of search to the extent of Rs. 16,00,400/-. However, in respect of remaining cash of Rs.4,45,000/- the submission of appellant that the said cash is out of his current year's income is not supported with cogent documentary evidence. Neither before the AO nor before the undersigned, appellant could substantiate his contention that the cash of Rs. 4,45,000/- actually is the part of his current year income. Further, appellant has failed to explain the purpose of keeping his regular income in cash in the locker when, he is a renowned professor of a university and deriving his salary income through banking channel. Thus the story to explain the source of cash of Rs. 4,45,000/- is only an afterthought of the appellant without any cogent evidence and lacks credence, hence it is clear from the above facts that said cash of Rs. 4,45,000/- is the unexplained income of the appellant for which, no explanation is with him, thus out of addition of Rs. 20,45,000/-, Rs. 16,00,400/- is hereby treated as explained and remaining amount of Rs. 4,45,000/- is hereby treated as unexplained and ground of appeal of the appellant is allowed in part, accordingly.” 5. Being dissatisfied with the said order, the assessee preferred a further appeal before the Tribunal, vide ITA No. 131/DDN/2019, which was decided on 05.01.2023. The Tribunal observed in paragraph nos. 6 and 7 of the impugned order as follows :- “6. However, in respect of remaining cash of Rs. 4,45,000/- the submission of appellant that the said cash is out of his current year's income is not supported with cogent documentary evidence. It was held by the revenue that the said cash of Rs. 4,45,000/- is unexplained income of the appellant for which, no explanation is with him. Thus, out of amount of Rs. 20,45,000/- found, Rs. 16,00,400/- was treated as explained and remaining amount of Rs. 4,45,000/- is hereby treated as unexplained. 7. During the arguments before us, it was submitted that the assessee had professional income of Rs.9,96,750/- and the amount of cash found of Rs. 4,45,000/- pertains to this receipt. At the same time, we find from the computation of income that out of Rs.9,96,750/-, the assessee has incurred expenses of Rs.4,42,680/- offering an amount of Rs.5,54,070/- to tax under the head \"income from business & profession. Hence, an estimate of Rs.1,00,000/- may be conveniently held to be part of Rs.4,45,000/- found in the locker. Thus, out of the total amount of Rs. 20,45,000/- found Rs. 17,00,400/- be treated as explained.” 6. We have heard Mr. Pande, learned counsel for the appellant/ assessee. 7. A perusal of the orders passed by the Assessing Officer, Commissioner of Income Tax (Appeals), and the Tribunal would show that, admittedly, cash to the tune of Rs. 4,45,000/-, found in the locker of the assessee upon search, was claimed to be the professional income of the assessee. The Tribunal has taken into consideration the computation of income of the assessee, which comes to Rs. 9,96,750/-, as well as the expenses incurred by the assessee to the tune of Rs. 4,42,680/-, and after taking into consideration the aforesaid facts and figures, an amount of Rs. 1 lakh has been assessed as the undisclosed income, as Rs. 20,45,000 minus 17,00,400/-. 8. In our view, no substantial question of law arises for consideration in the present Appeal, since it is a mere computational exercise, which has been undertaken by the Income Tax Authorities and the Tribunal. 9. The present Income Tax Appeal is, accordingly, dismissed. 10. Consequently, pending application(s), if any, also stand disposed of, accordingly. (Rakesh Thapliyal, J.) (Vipin Sanghi, C.J.) 04.08.2023 04.08.2023 Rahul "