Indian Kanoon - Search engine for Indian Law

"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 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.

IT(SS)A No. 69/Ahd/2018 Shri Narsingbhai Dahyabhai Patel Vs. ITO AY : 2014-15 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."

"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."