TaxTMI 
TaxTMI 
2025 (5) TMI 2128
X X X X Extracts X X X X
X X X X Extracts X X X X
....BE is wrong and Rs. 555024/- unjustified since assessment was 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) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rchase or sale bills are involved. The difference representing the income of speculation transactions 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 th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....80,000/- represents his unexplained income as per provisions of Section 69A r.w.s. 115BBE of the IT Act, 1961. 4. Against the said order, the assessee filed 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 ma....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. v. the appellant contended that these speculation transactions were carried out in cash only and difference representing the income was received in cash only, but any documentary evidence to substantiate this contention 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 tot....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... supplier was made directly, though he acted as a facilitator. The transaction of cash received as margin money was duly recorded in the cash book maintained for this income. Cash accumulated from these transactions was kept in his locker for security reasons. In view 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed cash of Rs. 30,80,000/- during the course of search and the transaction of cash received as margin money was duly recorded in the cash book maintained for this income and cash accumulated from these transactions was kept in locker for security reasons. The said claim of the assessee has 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 a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Charging of interest u/s 234A and 234B 5. That the Assessing Officer has erred in not allowing credit as self assessment tax paid for Rs. 3080000/- seized by the Department inspite of the letter dated 25-09-2019 and filed with the Department on 26-09-2019, that the seized amount be utilized towards the self assessment tax. Again 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 c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g liability" on the part of the assessee when it filed the return of income and therefore it was covered by the provisions of section 132B(1)(i) of the Act. In the cited case a search was conducted on Thacker Group on 27.07.2006, wherein, cash to the extent of Rs. 20 lakhs was found from locker no.646 with Canara Bank, Vasi Branch, Mumbai, belonging to the assessee and the same 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 adju....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad correctly requested the AO to give credit of the seized cash towards the tax liability of the assessee upon filing of his return of income on 31.10.2019. In this regard, the assessee had made request for adjustment said cash towards existing tax liability first on 25.09.2019 and 23.05.2022. The ld. CIT(A) was not correct in holding that as per provision of section 132B(1) of the Act since no application for adjustment of seized cash towards any existing liability was filed by the assessee within 30 days from the end of the month in which cash was seized is not correct proposition of the law in the given facts of the case. The said proviso relates to a situation, wherein, the nature and source of acquisition of the seized assets is explained by the assessee to the satisfaction of the Assessing Officer and the assessee requests for release of the said seized assets after adjustment of any existing liability, whereas in the present case, the assessee has invoked the provisions of section 132B(1)(i) of the Act to adjust the cash seized of Rs. 30,80,000/- with the existing liability of the assessee of the tax payable on the return of income filed by the assessee. Therefore, respectfu....