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of <h1>Court affirms assessee's explanation on undisclosed income under Income Tax Act</h1> <h3>Commissioner of Income Tax, Karnal Versus Balbir Singh Mohinder Singh</h3> Commissioner of Income Tax, Karnal Versus Balbir Singh Mohinder Singh - tmi Issues:- Appeal under Section 260A of Income Tax Act, 1961 against ITAT order- Finding of the Tribunal regarding undisclosed income and source of seized cashAnalysis:1. Appeal under Section 260A of Income Tax Act, 1961 against ITAT order:The appeal in this case was filed by the revenue under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'I' New Delhi. The revenue sought to raise substantial questions of law regarding the findings recorded by the ITAT. The questions pertained to the correctness of the ITAT's decision in allowing the appeal of the assessee and deleting the addition of Rs. 1,60,000 made by the Assessing Officer and confirmed by the CIT (A).2. Finding of the Tribunal regarding undisclosed income and source of seized cash:During a police check, cash was found with the respondent and seized under Section 132 of the Act. Subsequently, an assessment was conducted under Section 158BC/BD for the block period 1997-1998 to 2003-2004, declaring the amount as undisclosed income. While the CIT (A) partly allowed the appeal of the respondent, the Tribunal accepted the explanation provided by the assessee in its entirety. The Tribunal emphasized the importance of providing the assessee with an opportunity to explain the source of the money before deeming it as unexplained income. It highlighted that the assessing officer should base the assessment on material evidence and not solely on statements of third parties unless corroborated by material evidence. The Tribunal referred to relevant case laws to support its decision, emphasizing the shift of burden to the revenue in such situations.In conclusion, the High Court, after hearing the arguments, upheld the Tribunal's finding, stating that it was not shown to be perverse. The Court dismissed the appeal, thereby affirming the decision of the Tribunal.
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