TaxTMI 
TaxTMI 
2025 (4) TMI 641
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....ormation received from the police, the team of Income Tax Officers/Officials reached to Office of the Superintendent of Police (West), Kanpur. On reaching there, the Police found the currency notes of a sum of Rs. 87,15,472/- in the possession of Shri Sudhakar Jaiswal and some more currency notes, value of which could not be determined by the Police because of their torn/soiled physical state. 2.2 The statement of Shri Sudhakar Jaiswal was recorded under Section 131 of the Income-tax Act, 1961 on 12.04.2019 to find out the source of cash in his possession. The appellant - Shri Sudhakar Jaiswal categorically admitted that he does not maintain any kind of regular books of accounts, bills/vouchers pertaining to his business of exchange of torn /soiled currency notes on commission basis. The income tax return is filed on the basis of transactions entered in his bank account. On the specific question regarding the source of cash amount of Rs. 87,15,472/-, he had given name of four persons for giving these currency notes. 2.3 On the basis of the statement of the appellant recorded on 12.04.2019 naming few persons said to have given those given currency notes to appellant, one Shri Ajee....
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....id, they were receiving the cash for exchange and the amount seized by the respondent was to given by the persons who sought exchange of their torn/soiled notes. In fact, due to notification for Election and imposition of Code of Conduct those persons did not come to collect their money found with the appellant and has been seized. The fact aforesaid has been ignored by the Adjudicating Authorities coupled with the facts that the appellant had disclosed the name of the persons who had given those notes for exchange. The affidavits of those persons were also filed but has not been relied by the Adjudicating Authority. In the light of aforesaid, this appeal has been filed to challenge the impugned order. Arguments of the respondent: 4. The appeal was contested by the respondent on all the grounds. It was submitted that on the information of the Police, the Officer of the Income-tax Deptt reached to the place of the appellant. Therein a sum of Rs. 87,15,472/- was found with the appellant of which initial explanation was different than the subsequent. At the first instance, the appellant had given name of four persons said to have given the money for exchange but later on stated that....
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....Kanpur, but both of them categorically denied having any such relations with Shri Sudhakar Jaiswal and termed the contention of Shri Sudhakar Jaiswal as false. During further enquiry, again the statement of Shri Sudhakar Jaiswal was recorded on 21.05.2019 in which he changed his statements and stated that out of total cash found in his possession amounting to Rs. 87,15,472/- Rs. 45,68,687/- belonged to his father, Shri Jagdish Prasad Jaiswal, and Rs. 41,46,785/- pertained to himself. He further stated that out of Rs. 45,68,687l- possessed by his father Rs. 30,45,000/- was the amount which his father had exchanged against the soiled/ torn currency notes. The details of the persons who had given currency notes for exchanging to his father was also given. The remaining amount, that is Rs. 15,23,687/- was claimed as part of his father's savings/capital built up over the last 50 years earned from the business of exchanging soiled/torn currency notes. Regarding the claim that cash of Rs. 15,23,687- pertained to accumulated savings of Shri Jagdish Prasad Jaiswal, that it pertained to surplus accumulated from profits earned by him from his business of exchanging soiled/torn notes....
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....d given Rs. 5,00,000/- to his son-in-law, Shri Sudhakar Jaiswal in cash as gift out of her personal savings in FY 2018-19, that she had an income of Rs. 15,000 to Rs. 20,000/-- per month as rental income from her ancestral house, and she used to spend around Rs. 10.000/- per month as monthly expenditure and that she is not assessed to tax. However, she could not produce any documentary evidence to substantiate her claim regarding the quantum of income earned by her, which could explain the source of income or funds from which she gave cash amount of Rs. 5.00.000/- to appellant. Further, no Bank Statement has been furnished to show that the cash amount of Rs. 5 Lakhs had been withdrawn by her and then given to appellant. Thus, in absence of any credible explanation or documentary evidences for explaining the source of funds in her hands to the tune of Rs. 5,00,000/-, which she has claimed as given in cash to appellant, the contention of Smt. Savitri Devi that she gave cash of Rs. 5 lakhs to appellant from her savings is not found to be tenable. Further, with regard to the cash amount of Rs. 5,00,000/- claimed as given to appellant by his brother, Shri Madhukar Jaiswal, he in his s....
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....y evidences, the claim of appellant that cash amounting to Rs. 10,16,785/- pertained to accumulated profits of his business of exchanging soiled/torn notes on commission basis, could not be substantiated and thereby cannot be accepted. It is also when he did not disclose his alleged saving while he made statement on 12.04.2019. As discussed in aforesaid paras, it has been claimed by Sh. Sudhakar Jaiswal that out of total cash found in his possession amounting to Rs. 87,15,472/- Rs. 45,68,687/- belonged to his father, Shri Jagdish Prasad Jaiswal, and Rs. 41,46,785/- pertained to himself. He further stated that out of Rs, 45,68,687/- of cash belonging to his father Rs. 30,45,000/- was the amount which his father had exchanged against the soiled torn currency notes. The details of the persons who had given currency notes for exchanging to his father was also submitted by him, the details of which are as under: Sr. No. Name of the Persons Amount (in Rs. ) 1) Sh. Abhishek Kesharwani 3,10,000/- 2) Sh. Ashish Gupta 3,70,000/- 3) Sh. Atul Pandey 3,60,000/- 4) Sh. Jeetu Dixit 3,95,000/- 5) Sh. Lal Sahab Singh 3,90,000/- 6) Sh. Neeraj Omar 2,95,000/- 7) Sh. RadheyShy....
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....r exchanging soiled/torn/mutilated currency notes has been detailed as under: "Exchange of Soiled Notes: (1) Where the number of notes presented by a person is up to 20 pieces with a maximum value of Rs. 5000 per day, banks exchange them over the counter, free of charge. (2) Where the number of notes presented by a person exceeds 20 pieces or Rs. 5000 in value per day, banks may accept them, against receipt, for value to be credited later. Banks may levy service charges as permitted in Master Circular issued by RBI. Exchange of Mutilated and Imperfect Notes: (1) Where the number of notes presented by a person is up to 5 pieces, non-chest branches should normally adjudicate the notes as per the procedure laid down in Part |II of NRR, 2009 and pay the exchange value over the counter. If the non- Chest branches are not able to adjudicate the mutilated notes, the notes may be received against a receipt and sent to the linked currency chest branch for adjudication. The probable date of payment should be informed to the tenderers on the receipt itself and the same should not exceed 30 days. Bank account details should be obtained from the tenderers for crediting the exchange ....
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.... those affidavits became doubtful and have given with afterthought. 6. The discussion, referred above, shows that the appellant failed to give explanation for possession of the currency note of Rs. 87,15,472/-. He could not produce any document to show exchange of torn/soiled notes from the bank and even failed to justify excuse of imposition of Code of Conduct. If one was in a position to bring the money for exchange during the period of Code of Conduct, why they would not be in the position to collect the money immediately thereupon rather, to keep the money with the appellant for days together. Thus, the excuse taken by the appellant for imposition of Code of Conduct to justify the retention of amount with him cannot be accepted. 7. The further excuse to justify the possession of the notes in reference to his business of exchange of torn/soiled currency could not be proved by the appellant. He could not produce any material to show exchange of torn/soiled currency notes from the bank despite the Circular issued by the Reserve Bank of India for the aforesaid and the limit of the amount for exchange of notes. 8. It is also a fact that statements of appellant were inconsistent. ....