Assessee fails to justify unexplained cash under Section 69A but succeeds in deleting jewellery addition following CBDT guidelines

The ITAT Chennai dismissed the assessee's cross-objection regarding unexplained money under section 69A, upholding additions for cash seized during search operations. The assessee failed to substantiate that income was earned over several years or provide acceptable working for spreading the income. However, the tribunal allowed the assessee's appeal on jewellery addition, following CBDT instructions and HC precedents that specified quantities are reasonable per Hindu customs. The assessee's sworn statement attributing jewellery to family members and 800 grams as Streedhan remained uncontroverted, supporting deletion of the jewellery addition.

---

---

Issues Involved:
1. Deletion of addition as unexplained investment towards the value of jewellery.
2. Sustaining the addition as unexplained income u/s 69A of the IT Act.

Summary:

1. Deletion of Addition as Unexplained Investment Towards the Value of Jewellery:
The revenue contested the CIT(A)'s decision to delete the addition of Rs. 78,23,239/- made as unexplained investment towards the value of jewellery found during the search. The CIT(A) relied on the assessee's explanation that the income and resources from AYs 2014-15 to 2020-21 were sufficient to justify the investment in jewellery. The CIT(A) also considered various judicial decisions and the CBDT Instruction No. 1916, which acknowledges the customs in Hindu Society regarding the possession of jewellery. The Tribunal upheld the CIT(A)'s decision, noting that the revenue did not provide contrary evidence, and the assessee's explanation remained uncontroverted.

2. Sustaining the Addition as Unexplained Income u/s 69A of the IT Act:
The assessee challenged the CIT(A)'s decision to sustain the addition of Rs. 33,48,921/- as unexplained income u/s 69A. The cash was found during a search at the business premises of M/s Sri Ram Studios and was attributed to the assessee based on the accountant's statement. The Tribunal found that the assessee failed to substantiate the source of the cash and did not provide acceptable working to spread the income over several years. Therefore, the Tribunal concurred with the lower authorities and dismissed the cross-objection filed by the assessee.

Conclusion:
The Tribunal dismissed the appeal of the revenue regarding the addition of jewellery and upheld the CIT(A)'s decision. The Tribunal also dismissed the cross-objection filed by the assessee concerning the addition of cash as unexplained income u/s 69A. The order was pronounced on 3rd April 2024.

---