TaxTMI 
TaxTMI 
2025 (5) TMI 2128
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....as made at the returned income and section 69A is not applicable in our case. 3. That interest charged in the assessment order including interest Rs. 663589/-w/s 234B is wrong and illegal since there is no default in payment of self assessment tax and the tax was paid by adjustment of seized cash. 4. That application of section 153A is wrong and illegal as there is no reason or basis for invoking such provision. 5. That initiation of penalty proceedings u/s 271AAB(1A) is wrong and unjustified. 3. Brief facts of the case:- A search was conducted by the Department on 27-11-2018 in Fakir Chand Lockers and Vaults Pvt. Ltd., Khari Baoli, Delhi-110006. The assessee's locker no.280 at the said vault was also covered and searched on 27.11.2018 and cash of Rs. 30,80,000/- was seized from the said locker. The assessee filed his return of income on 31.10.2019 declaring total income of Rs. 35,95,460/- which inter alia included income representing cash amounting to Rs. 30,80,000/- seized from the said locker. In his reply to the DDIT(Inv.), Unit-8(3), New Delhi, dated 10.04.2019, to the summons u/s 131(1A) of the Act, dated 05.04.2019, the assessee stated that the seized cash of Rs. 30,8....
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....sactions was received in cash only and was kept in locker for security reasons. 4.2. The assessee has no documentary evidences in support of his claim submitted that in the income tax return filed by the assessee for A.Y. 2019-20, he has declared an income of Rs. 35,95,460/- which includes cash seized amounting to Rs. 30,80.000/- under the head "Income from Other sources". Assessee's response was not found satisfactory. Mere declaration that the cash seized was generated from the speculative trade of food grains, without any documentary evidence for the same doesn't lend any credibility to assessee's argument and is just based on concocted story with the main purpose to evade tax. As the assessee's reply to the questionnaire was not satisfactory, a show cause notice dated 25.03.2021 was issued to the assessee "On the perusal of Income tax return filed by you on 30.10.2019, it is observed that you have declared the seized amount of Rs. 30,80,000/- under the head income from other sources. However, you have not provided supplementary evidences with respect to the speculative income. Hence, keeping in view the principals of natural justice, you are hereby asked once again ....
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....d an appeal before the Ld. CIT(A). The ld. CIT(A) in para-6.5 of his order did not accept the plea of the assessee that the disclosed amount of Rs. 30,80,000/- represented 'income from other sources' on account speculation transaction in food grains business. The ld. CIT(A) noted the explanation of the assessee submitted during the assessment proceedings in para-6.3 of his order which is reproduced as under:- 6.3 On perusal of ITR filed by the appellant, it is observed that the appellant has disclosed amount of Rs. 30,80,000/- under the head income from other sources. During the assessment proceedings, the source of cash explained by the appellant is as under: "...the source of cash seized was disclosed as income from speculation transactions in food grains over the period April 2018 to October 2018 relevant to A.Y. 2019- 20. Further, the assessee mentioned that in speculation transaction no actual delivery of goods were taken or given and also no payments for value of goods purchased or sold were made or received. Only difference between the purchase rate and sale rate was received or paid. Hence, no purchase or sale bills are involved. The difference representing the income....
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....has not been furnished by the appellant. vi. the appellant has neither filed any documentary evidence to rebut the view taken by the AO nor furnished any details to substantiate his claim of speculation transaction in food grains. vii. the appellant also not produced any details or evidence that this speculation transactions were also carried out by the appellant before April, 2018. Without any documentary evidence, it is hard to believe that appellant in April, 2018 started speculation trading and earned Rs. 30,80,000/- in just 7 months and then left. If appellant was so good in it, why such activity was not carried out after search action. 6.6 In view of above discussion, I do not find any reason to interfere with the view taken by the Assessing and therefore, it is held that the appellant has failed to substantiate his claim that source of cash found was out of speculation transactions in food grain market. Therefore, in totality, the appellant has failed to explain nature and source of cash found and seized of Rs. 30,80,000/- 7. Against the order of the Ld. CIT(A), the assessee is in appeal before us. 8. During the hearing before us, the ld. Counsel for the assessee rel....
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....of the nature of transactions and other facts stated hereinabove the provisions of section 69A is not attracted in our case. Since we have complied with the conditions of that section i.e., the transaction of income stands recorded in the books of account, maintained by assessee for this source of income and further explanation was offered about the nature and source of acquisition of cash of Rs. 30,80,000/-recovered from the locker to the satisfaction of the Assessing Officer. This amount of Rs. 30,80,000/- was duly declared as income in the return filed for A.Y.2019-20 and has formed the basis of assessment. The rejection of our explanation by the Assessing Officer that there is no documentary evidence in support of our claim is not in accordance with law since in cash transaction deal in speculative transactions it is not possible to create documentary evidence. Hence the change in section from 'Income from other source' to income from section 69A for this income of Rs. 30,80,000/- is wrong and unjustified and is not in accordance with law. In our case since the source of income was declared even before its seizure and also in the return of income filed, the explanatio....
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....s been duly highlighted in the written submission of the assessee as reproduced earlier in para no.8 of this order. However, neither the assessee has furnished any evidence in support of his claim as to how the income was disclosed during the course of search as speculative business from food grains nor the said cash book in which this transaction was recorded has been placed before us. The AO has not mentioned anything about the above two claims of the assessee and the ld. CIT(A) has also not dealt with it. However, the claim has been made by the assessee and, therefore, the onus is on him to satisfy the AO with his claim that the seized cash of Rs. 30,80,000/- represented his income from speculative business in food grains business for the period April, 2018 to October, 2018. Therefore, in the given facts of the case, the addition of Rs. 30,80,000/- u/s 69 r.w.s. 115BE of the Act made by the AO and confirmed by the Ld. CIT(A) cannot be sustained. However, since the above explanation of the assessee and the relevant cash book of the assessee was not examined by the AO and further the details of statement recorded, if any of the assessee during the course of search on 27.11.2018 in....
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....gain the similar request was made vide our letter dated 23-05-2022, filed on 27- 05-2022 with the Department. This request is also evident from the return of income filed for A.Y.2019-20, wherein this amount was also declared as income. The CIT(A) erred in not giving us relief on this account by referring to the first proviso to section 132B(1) since the proviso is applicable only to cases where assessee requests for release of assets and not where the asset seized is to be adjusted against the existing liability. 6. The Hon'ble Income Tax Appellate Tribunal in case of Narendra N Thakker Vs Department of Income Tax in IT(SS)A No.01/Kol/2012 it was held it is beyond doubt that the terms 'Advance Tax' and 'Self Assessment Tax' are distinct and separate. The Income Tax Appellate Tribunal, D Bench, Kolkata in case of Nitin Kumar Vs ACIT in ITA No.1457/Kol/2016 has held that when the seized cash was available with the Income Tax Deartment onwards it would be unfair and unjust to charge interest on the assessee u/s 234B of the Act, merely because, the seized cash was given credit on a later date by the Ld. AO. Again the Income Tax Appellate Tribunal Bench B in c....
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....was seized by the Department. The assessment was completed u/s 153A of the Act on 01.07.2008 determining taxable income at Rs. 60,12,240/- raising a demand of Rs. 24,02,249/-. Originally, the AO gave credit for seized cash of Rs 20,00,000/- towards self assessment tax which was later rectified u/s 154 of the Act by the AO on 2.3.2010 by revoking the credit for seized cash of Rs 20,00,000/- as according to the AO, there was no existing liability on the date of adjustment of the seized cash, and consequentially charged interest u/s 234B and 234C of the Act. This action was not confirmed by the Ld. CIT(A) and the Revenue was in appeal before the Tribunal on the following grounds of appeal:- "1. That in the facts and circumstances of the case and in law, the Learned CIT(A) has erred in allowing the adjustment of seized cash against self assessment tax liability though Income Tax Act does not provide for adjustment of seized cash before determination of tax liability." 13. The relevant finding of the Tribunal holding that the action of the AO in withdrawing the credit of self-assessment tax was not correct and the self-assessment tax becomes payable becomes 'existing liability' on th....