Unexplained cash addition fails where group company owns the cash and the dispute is settled before the forum.

Cash found in an assessee's locker was held not taxable as unexplained money in his hands where the group company owned up the cash before the settlement forum and the dispute had been settled. The fact that the locker stood in the assessee's name was insufficient, because the record supported ownership by the group entity and the first appellate authority accepted that position after the remand report. The assessee's non-participation in the settlement proceedings did not change the outcome once ownership and settlement were established.

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Issues: Whether the addition of cash found in the assessee's locker was sustainable in the assessee's hands when the group company owned up the cash before the settlement forum and the matter stood settled.

Analysis: Cash was found in a locker standing in the assessee's name, but the material on record showed that the group company had owned up the cash and the dispute had been settled before the settlement forum. On those facts, the cash could not be treated as unexplained money taxable in the assessee's hands merely because the locker was maintained by him. The assessee's non-participation in the settlement proceedings did not alter the position once ownership of the cash stood ed by the group entity and the first appellate authority had accepted that position after the remand report.

Conclusion: The addition was not sustainable in the assessee's hands and the Revenue's challenge failed.

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