2025 (2) TMI 187 - AT - Income Tax

Assessee wins deletion of additions for unaccounted money lending business and unexplained income transactions

ITAT Delhi upheld CIT(A)'s deletion of multiple additions against the assessee including unaccounted money lending business, payments to parties, ... Addition on account of unaccounted money lending business - CIT(A) deleted addition - substantive addition in the hands of assessee - HELD THAT:- No infirmity in the order of the Ld. CIT(A) in deleting the addition in dispute as addition made in the hands of the assessee was deleted by the CIT (A). We further noted that as per the said order, the same addition was made in the hands of M/s Bulland Buildtech Pvt. Ltd. on substantive basis. Further, in the case of M/s Bulland Buildtech Pvt. Ltd. for AY 2007-08 [2019 (9) TMI 760 - ITAT DELHI] has dismissed the appeal of the Revenue on the ground that the amount of tax effect in the case is below the monetary limit fixed for filing of appeals by Revenue. Decided in favour of assessee. Addition on account of unaccounted payment of money to different parties - CIT(A) deleted addition - HELD THAT:- CIT(A) deleted the addition on the ground that the transactions were held belongs to Bulland Leasing and Finance P. Ltd. and not to the assessee. Revenue had filed an appeal before the ITAT against the order of ld.CIT(A) on the deletion of said addition in the case of Bulland Leasing & Finance for AY 2007-08 and the ITAT [2019 (10) TMI 1604 - ITAT DELHI] has dismissed the appeal of the Revenue on the ground that the amount of tax effect is less than the monetary limits fixed for filing of appeals by Revenue as per CBDT Circular No.17/2019 dated 08th Aug 2019. Decided in favour of assessee. Unexplained income - CIT(A) deleted addition - HELD THAT:- We find that this addition was deleted by the ld. CIT (A) as this amount of personal expenditure might have met out of his own funds and there is no evidence to suggest that the expenditure has been met out of undisclosed income. Thus no infirmity in the order of the Ld. CIT(A) in deleting the addition. Unaccounted cash - CIT(A) deleted addition - HELD THAT:- We find that in the remand report, the AO has confirmed that Statement of Affairs filed by the assessee has declared cash balance of Rs. 1,62,000/- as on 31.3.2011. The cash was not seized, thus implying that the AO is satisfied with cash in hand. Hence, ld. CIT(A) has rightly deleted this addition, which does not need any interference on our part, therefore, we uphold the same and accordingly, reject the ground raised by the revenue. Addition on account of unaccounted jewellery - assessee has not furnished member-wise details of jewellery owned by them nor have furnished any documentary evidence to prove it pertains to all the family members and source of acquisition of the same - CIT(A) deleted addition - HELD THAT:- We find that ld. CIT(A) noted that ancestral jewellery was found and the amount was within the limit prescribed in the CBDT instruction vide instruction No. 1916 dated 11.5.1994. Therefore, it will not fall under the category of undisclosed income/assets of the assessee. Hence, CIT(A) has rightly deleted this addition, which does not need any interference on our part - reject the ground raised by the revenue. Unaccounted receipt from Chit Fund Business - CIT(A) deleted addition - HELD THAT:- We find that this issue is covered by the decision of the ITAT in the case of Rajneesh Nagar. We observed that Mr. Nagar is the Co- Director in Bulland Group and the addition was deleted ACIT, Central Circle-25, New Delhi Versus Rajneesh Nagar [2017 (1) TMI 1250 - ITAT DELHI]. - Decided against revenue. Unaccounted payment to different parties - CIT(A) deleted addition - HELD THAT:- We find that the payments relates to M/s Bulland Leasing and Finance Ltd. and all payments pertains to AY 2007-08, therefore, the same cannot be added in the hands of the assessee in AY 2011-12 and thus was rightly deleted by the Ld. CIT(A). Unaccounted money transaction - CIT(A) deleted addition - HELD THAT:- Addition was made on a protective basis in the hands of M/s Bulland Buildtech Pvt. Ltd. and decided in favour of the assessee by CIT(A). Thus, the addition was rightly deleted in the hands of assessee. He further submitted that since the amount was found to be cash balance of M/s Bulland Automobiles, the action is not sustainable. It is noted that ld. CIT(A) observed that the above transactions pertain to some other entities and in other assessment years, hence, the same was rightly deleted by the Ld. CIT(A). The Tribunal considered several appeals filed by the Revenue against the orders of the Commissioner of Income-tax (Appeals) concerning various assessment years. The core issues revolved around the deletion of additions made by the Assessing Officer (AO) on accounts of unaccounted money lending business, unaccounted payments, unexplained income, unaccounted cash, unaccounted jewelry, unaccounted chit fund business receipts, and unaccounted money transactions.Issue 1: Deletion of Addition on Account of Unaccounted Money Lending BusinessThe Tribunal examined whether the deletion of the addition of Rs. 80,00,000/- by the CIT(A) was justified. The AO had made a substantive addition in the hands of the assessee and a protective addition in the hands of Bulland Buildtech Pvt. Ltd. The CIT(A) found that the transaction was related to Bulland Buildtech Pvt. Ltd., and thus, deleted the addition in the assessee's hands. The Tribunal upheld this decision, noting that the ITAT had dismissed the Revenue's appeal in the case of Bulland Buildtech Pvt. Ltd. due to low tax effect.Issue 2: Deletion of Addition on Account of Unaccounted Payment to Different PartiesThe Tribunal considered the deletion of Rs. 1,32,15,769/- by the CIT(A), which the AO had added to the assessee's income. The CIT(A) found that these transactions were related to Bulland Leasing & Finance Pvt. Ltd. and deleted the addition in the assessee's case. The Tribunal upheld this decision, noting that the ITAT had dismissed the Revenue's appeal in the case of Bulland Leasing & Finance Pvt. Ltd. due to low tax effect.Issue 3: Deletion of Addition on Account of Unexplained IncomeThe Tribunal reviewed the deletion of Rs. 81,460/- by the CIT(A), which the AO had added as unexplained income. The CIT(A) concluded that the assessee had sufficient capital and cash to explain the expenditure, and there was no evidence of undisclosed income. The Tribunal found no infirmity in this conclusion and upheld the CIT(A)'s decision.Issue 4: Deletion of Addition on Account of Unaccounted CashThe Tribunal examined the deletion of Rs. 1,24,000/- by the CIT(A) for AY 2011-12. The CIT(A) noted that the assessee had sufficient resources to explain the cash found, and the search team did not seize the cash, indicating satisfaction with the source. The Tribunal upheld the CIT(A)'s decision, finding no need for interference.Issue 5: Deletion of Addition on Account of Unaccounted JewelleryThe Tribunal considered the deletion of Rs. 16,53,580/- by the CIT(A) regarding unaccounted jewelry. The CIT(A) observed that the jewelry was ancestral and within the limits prescribed by the CBDT, indicating no undisclosed income. The Tribunal upheld this decision, agreeing with the CIT(A)'s reasoning.Issue 6: Deletion of Addition on Account of Unaccounted Receipts from Chit Fund BusinessThe Tribunal reviewed the deletion of Rs. 4,03,72,823/- by the CIT(A) related to chit fund business receipts. The CIT(A) found that the addition was based on incorrect entries and calculations. The Tribunal noted that the issue was covered by a previous ITAT decision and upheld the CIT(A)'s deletion of the addition.Issue 7: Deletion of Addition on Account of Unaccounted Payment to Different PartiesThe Tribunal examined the deletion of Rs. 1,43,80,042/- by the CIT(A), which the AO had added as unaccounted payments. The CIT(A) found that these transactions related to Bulland Leasing & Finance Pvt. Ltd. and pertained to an earlier assessment year. The Tribunal upheld the CIT(A)'s decision.Issue 8: Deletion of Addition on Account of Unaccounted Money TransactionThe Tribunal reviewed the deletion of Rs. 2,11,06,950/- by the CIT(A) concerning unaccounted money transactions. The CIT(A) noted that the transactions related to other entities and assessment years. The Tribunal upheld the CIT(A)'s decision, finding no infirmity.Significant HoldingsThe Tribunal consistently upheld the CIT(A)'s decisions across all issues, emphasizing the importance of correctly attributing transactions to the appropriate entities and assessment years. The Tribunal also highlighted the necessity of substantial evidence to support additions made by the AO. The decisions were largely influenced by previous ITAT rulings and CBDT guidelines, particularly regarding the treatment of ancestral jewelry and the monetary limits for appeals.