2025 (7) TMI 1664

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....nts maintained by the appellant and that no satisfactory explanation is offered by the assessee. In the instant case the appellant has satisfactory explanation and therefore no addition is warranted under section 69A of the Act. 4. That the Ld. CIT(A)-20 erred in law in confirming the action of the Assessing Officer in changing the head of income from business to unexplained money under section 69A by invoking the provision of Section 11 SBBE of the Income Tax Act, in doing so, the learned CIT(A) erred in confirming the applicability of provision of Section 115BBE of the Income Tax Act, 1961. 5. The learned CIT(A) ought to have seen that the alleged amount was seized from the business premises of the appellant and that it is undisputed that the only business of the appellant is whole sale and retail sales of cosmetics and therefore impugned amount can only be treated as generated out of business of the appellant and therefore the provisions of section 115BBE of the Act will have no application as the source of excess physical stock is attributable business. 6. The learned CIT(A)-20 ought to have seen that the AO has not brought any contrary material on record to state that....

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..... 7. Accordingly, the AO proceeded to complete the assessment u/s.144 r.w.s. 153B(1)(b) of the Act determining the total income of the assessee at Rs. 45,39,150/- and in doing so the AO reversed the additional business income of Rs. 20,00,000/- offered by the assessee and assessed the entire seized cash of Rs. 20,00,000/- as unexplained money u/s. 69A of the Act. 8. Aggrieved by the order passed by the AO, the assessee preferred an appeal before the ld.Commissioner of Income Tax (Appeals)-18 (ld.CIT(A)). The ld.CIT(A) vide his orders dated 30.08.2024 upheld the assessment order by confirming the action of the AO. Aggrieved by the order of the learned first appellate authority the assessee has preferred the present appeal before us. 9. During the course of a search u/s.132 of the Act conducted at the assessee's business premises on 16.03.2021, a sum of Rs. 40,00,000/- in cash was found and seized. This cash was not recorded in the regular books of accounts maintained by the assessee. Consequently, the AO treated this cash as "unexplained money" u/s.69A of the Act and subjected it to tax under the provisions of Section 115BBE of the Act. 10. During the search proceedings, the ass....

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....t was never retracted by the assessee at any stage, and the Department has not brought on record any material to suggest that the disclosure was not genuine or was made under duress. 4. Consistent with the said statement, the assessee, in good faith and in compliance with the law, disclosed the entire sum of Rs. 40,00,000/- in the returns of income filed under Section 153A of the Act. The assessee voluntarily offered and declared the entire amount as business income in returns filed u/s.153A of the Act, across three assessment years, as under: * AY 2019-20: Rs. 7,50,000/- * AY 2020-21: Rs. 12,50,000/- * AY 2021-22: Rs. 20,00,000/- Part of the seized amount which was offered as business income for the AY: 2019-20 and 2020-21 was accepted by the department and the assessments were completed without any adverse findings or further additions with respect to this income. 5. The AO has proceeded to invoke the provisions of Section 69A of the Act and sought to assess the entire cash seized as "unexplained money" which is legally and factually untenable. The cash seized has been duly explained as arising from business transactions. The explanation is neither unreasonable ....

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.... business income and paid tax thereon. Thus, it cannot be taxed again u/s.69A of the Act, nor can the punitive rate u/s.115BBE be invoked. 14. In view of the above facts and legal position, the ld.AR prayed that: 1. Accept the sum of Rs. 20,00,000/- offered by the assessee under the head business income AY 2021-22 of Rs. 20,00,000/- 2. To delete the addition of Rs. 40,00,000/- made u/s.69A of the Act, and consequently to set aside the invocation of Section 115BBE of the Act, as the said addition is without legal basis and is contrary to the settled principles of law and judicial precedents. 15. We have heard the rival contentions perused the material available on record and gone through the orders of the authorities along with submissions and case laws relied upon by both the parties. Admittedly, the search u/s.132 of the Act conducted at the assessee's business premises on 16.03.2021, a sum of Rs. 40,00,000/- in cash was found and seized. This cash was not recorded in the regular books of accounts maintained by the assessee. Consequently, the AO treated this cash as "unexplained money" u/s.69A of the Act and subjected it to tax under the provisions of Section 115BBE of the A....