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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the addition of Rs.4,66,09,558/- under section 132(4A) read with section 69A of the Income-tax Act, 1961 could be sustained in the hands of the appellant (director) or whether it correctly belongs to the company which operated the lockers.
Analysis: The issue was examined with reference to the statutory presumption in section 132(4A) of the Income-tax Act, 1961 and the scope of assessment under section 69A. The record shows that the lockers were the property of the company, locker rents were recorded in the company's books, and documents and agreements relating to locker operation were in the name of the company. The company failed to maintain adequate KYC for certain locker holders, resulting in unclaimed contents; however, there was no evidence linking ownership or individual operation of those lockers to the appellant in his personal capacity. The statutory presumption under section 132(4A) is rebuttable; the Revenue bears the burden to establish ownership contrary to the records. Given the absence of evidence connecting the seized cash and jewellery to the appellant personally and the presence of records indicating company ownership and accounting for locker rents, the presumption could justifiably be applied against the company rather than the appellant.
Conclusion: The addition under section 132(4A) read with section 69A of the Income-tax Act, 1961 is not sustainable against the appellant and is to be assessed in the hands of the company; the appeal by the Revenue is dismissed (decision in favour of the assessee).
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