SH. AVINASH SINGLA,LUDHIANA V. DCIT, CENTRAL CIRCLE -1, LUDHIANA

ITA 597/CHANDI/2022

AI Insights

The case revolves around an appeal by Shri Avinash Singla against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs.6 lacs to his income for the assessment year 2019-20. This addition was initially made by the Assessing Officer following a search and seizure operation under Section 132(1) of the Income Tax Act, 1961, at the residential premises of the assessee, where unexplained cash was found. The Tribunal examined the explanations provided by the assessee regarding the sources of the cash, including savings from family members and a gift from his brother, and considered the additional income declared by the assessee in a related business entity to cover such discrepancies. Ultimately, the Tribunal concluded that the assessee had sufficiently explained the source of the cash, leading to the allowance of his appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35569 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUSUM BA NSAL
• Assessee Lawyers: ROHIT KAPOOR
• Keywords: Gift
• Section: 143(3); 143(2); 139(4)

Judgement Text

"आयकर अपील य अ धकरण,च\u0010डीगढ़ \u0014यायपीठ, च\u0010डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 597/CHD/2022 नधा\u0011रण वष\u0011 / Assessment Year: 2019-20 Shri Avinash Singla, C-47 C/o Avinash Industries, Focal Point, Khanna. Vs The DCIT, Central Circle-1, Ludhiana. \u0016थायी लेखा सं./PAN NO: ACYPK9591N अपीलाथ\u001a/Appellant \u001b यथ\u001a/Respondent Assessee by : Shri Rohit Kapoor, Advocate and Shri Virsain Aggarwal Revenue by : Smt. Kusum Bansal, CIT DR Date of Hearing : 02.12.2024 Date of Pronouncement : 08.01.2025 PHYSICAL HEARING O R D E R PER RAJ PAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 17.06.2022 passed for assessment year 2019-20. Though the assessee has taken five grounds of appeal but his solitary grievance is that ld. CIT(A) has erred in confirming the addition of Rs.6 lacs which was ITA No.597/CHD/2022 A.Y.2019-20 2 added by the Assessing Officer on account of unexplained cash found at the residential premises during the course of search. 2. The brief facts of the case are that a search & seizure operation under Section 132(1) of the Income Tax Act was carried out on 25.04.2018 at the residential premises of the assessee alongwith various business premises of the group. The AO has issued notice and a return of income was filed on 31.12.2019 declaring total income of Rs.7,38,280/-. According to the AO, this return was filed under Section 139(4) of the Income Tax Act. The AO has issued notice under Section 143(2) on 07.02.2020. On scrutiny of the accounts it revealed that a cash of Rs.10,72,500/- was found at the residential premises of Shri Avinash Singla at the time of search. This factum was put to Shri Avinash Singla during the course of search vide Question No. 12-13 while recording his statement under Section 132(4) of the Income Tax Act. The Question No. 12 exhibits that how much cash is lying within his residential premises. In reply to it, it was submitted by the assessee that approximately Rs. 10.50 lacs ITA No.597/CHD/2022 A.Y.2019-20 3 is available. Similarly, when it was put to the assessee that whether this cash belongs to somebody else, then assessee has replied that this cash related to him, his business concern and may be of family members but exact break-up cannot be given at present. During the course of assessment proceedings, AO confronted the assessee to explain source of this cash. The assessee has submitted that Rs. Four Lacs was brought at home by his son Shri Nitish Singla who is the Director, Avinash Agro Pvt. Ltd. and rest of the amount is savings of the family as well as Rs.7 lacs received by him as a gift from his brother. He has filed documentary evidence in respect of this plea. The ld. AO has accepted the availability of Rs.4 lacs from M/s Avinash Agro Pvt. Ltd. but did not accept balance explanation and made the addition of Rs.6 lacs. 3. Appeal to the CIT(A) did not bring any relief to the assessee. 4. With the assistance of ld. Representative, we have gone through the record carefully. It is pertinent to note that during the course of search, assessee in the capacity of one ITA No.597/CHD/2022 A.Y.2019-20 4 of the Director has declared a sum of Rs.10 lacs in M/s Avinash Agro Pvt. Ltd. to cover up any irregularity in explanation of any unexplained item. This Rs.10 lacs has been assessed in the hands of M/s Avinash Agro Pvt. Ltd. which was framed under Section 143(3) of the Income Tax Act. The ld. Counsel for the assessee has drew our attention to page No. 47 to 50 of the Paper Book where this factum is available in the assessment order. He has also referred to page No. 38 to 46, ITR-V and Computation of Income in the case of M/s Avinash Agro Pvt. Ltd. and these documents, it has been disclosed that assessee has declared additional income of Rs.10 lacs. Therefore, we are of the view that if explanation is taken into consideration, based on cumulative circumstances, namely; (1) Rs.10 lacs was declared to cover up such type of issues in the case of M/s Avinash Agro Pvt. Ltd.; (b) Past savings of the family members, and (c) Gift received from the brothers, then it would be established that source of cash is available with the assessee. It is difficult to establish a cash available in the family with a mathematic precision. It is to be appreciated on the normal human behaviour available in the ITA No.597/CHD/2022 A.Y.2019-20 5 family and if all the family members are assessable to tax, then possibility of their savings and availability of Rs.10 lacs could never be denied. Therefore, learned Revenue Officers have erred in not appreciating the facts and circumstances in right perspective and confirming the addition of Rs.6 lacs. We allow this appeal and delete the addition of Rs.6 lacs. 5. In result, appeal is allowed. Order pronounced on 08.01.2025. Sd/- Sd/- (KRINWANT SAHAY) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” आदेश क\u0002 \u0003ितिलिप अ ेिषत/ Copy of the order forwarded to : 1. अपीलाथ\u000f/ The Appellant 2. \u0003\u0010यथ\u000f/ The Respondent 3. आयकर आयु\u0014/ CIT 4. िवभागीय \u0003ितिनिध, आयकर अपीलीय आिधकरण, च\u0018डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "