TaxTMI 
TaxTMI 
2024 (4) TMI 1358
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.... indeed the respective cases, being the same, appeals raising common issues, per taken up for hearing together and, accordingly, heard together. This explains a common order, even as we shall for the sake of convenience refer to the file in Uma M.R. Chinni, as was during hearing. 2. The background facts of the case are that the assessee/s, a resident of Andhra Pradesh, was, along with two others, apprehended at the Excise check post while travelling in a bus from Hyderabad to Kozhikode on 19.7.2016, and cash in the sum of Rs.2,39,57,500 found on them, seized. The three deposed before the Excise officials, giving mutually consistent statements, i.e., of Rs.162.475 lakhs belonging to Shri Sravan Neela Kumar, one of the three persons, and the balance Rs.77.10 lakhs to the assessee, who further claimed the sum as belonging to his employer, Shri D. Ramesh, a Hyderabad based trader in gold/gold jewellery; that they were travelling to Kozhikode to purchase gold. Requisition u/s. 132A of the Act was, on information in this respect being provided by the Excise Department to the Revenue, issued, and the cash seized. No evidence in this respect, i.e., the stated purpose of the visit, or of....
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....further, fails to offer any explanation in this respect. Implicit therein, it is argued, is the notion that the assessee does not admit the same as his income. 3.1 We shall take up the legal ground first inasmuch as, where accepted, we may not be required to travel to the merits of the case, raised per the assessee's first ground. The adjudication by the ld. CIT(A) is also qua the legal ground. His order in it's operating part, essentially the same for both the appeals, as is the order/s of assessment, reads as under: '4.7 The applicability of provisions of sections 69A and 115BBE is carefully considered. Section 69A read as under: Unexplained money, etc. 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, sat....
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....emed income under sections 68/ 69/69A/69B/69C/69D. The provisions of section 115BBE are only consequential in nature, which are applicable only when the income chargeable to tax is in the nature of income assessable u/s 68 to 69D. 4.9 The provisions of 115BBE taxing certain types of income @ 60% were brought on statute by Finance Act, 2017 after demonization, after introduction of prevention of Black Money (Undisclosed foreign income & assets) Act; Prohibition of Benami Property Transactions Act, etc., with a view to curb the mischief of subsequently disclosing the undisclosed cash/entries/assets of earlier years in return of income filed for current year in the garb of regular business income or income from other sources and paying much less taxes and that too without paying any penalty also. This was also intended to prevent such disclosures at normal rates as compared to the rate @ 45% applicable for disclosing such cash under Prime Minister's Garib Kalyan Yojana, which was also applicable during the same financial year. 4.10 In the present case, the appellant was found to be in possession of cash of Rs 77,10,000/- on 19.7.2016. He admitted the possession o....
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....ities from the assessee. The same was neither recorded in his books of account nor otherwise explained as to its nature and source. The assessee disputed being assessed in its respect - which was as unexplained investment u/s. 69A, and, in any case, sought deduction for the loss on account of its confiscation. The Tribunal, distinguishing the decisions relied upon, i.e., CIT v. Kothari (SC) [1971] 82 ITR 794 (SC); CIT v. Piara Singh [1980] 124 ITR 40 (SC); CIT v. Shri Ram Chander [1986] 159 ITR 689 (P&H), upheld the Revenue's case. The income, it opined, was on facts not the profits or gains of the assessee's illegal business. It was, therefore, rightly assessed as deemed income u/s. 69A, and there was no question of allowance of deduction for the loss on its confiscation. This was upheld in further appeal; the Hon'ble Court holding as: '...on the facts, that it was clear that when the investment in or acquisition of gold, which was recovered from the assessee was not recorded in the books of account and the assessee offered no explanation about the nature and source of such investment or acquisition and the value of such gold was not recorded in the books of account, nor ....
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....ion of the Revenue in segregating, from the income surrendered during survey as business income, income on account of unexplained cash, deeming it as income u/s. 69A, and disallowing the claim of set off of business loss there-against, which was restricted to, apart from regular business income, the income surrendered on account of sundry creditors, repairs to building and advances to staff, i.e., relatable to the assessee's business, was upheld by the Tribunal and, on further appeal, by the Hon'ble High Court. The computational provisions applicable to different heads of income, it was explained, are not attracted qua income brought to tax under the deeming provisions, viz. ss. 69 thro' 69C, which accordingly is not liable to be classified under those heads of income. More recently, the Apex Court in Prakash Chand Lunia (Decd.) v. CIT [2023] 454 ITR 61 (SC), repelled the assessee's - a dealer in silver, claim of loss on account of confiscation by the Customs Deptt. apprehending it as of smuggled nature. While the Tribunal disallowed the assessee's claim against income deemed as so u/s. 69A, the Hon'ble High Court, relying on CIT v. Piara Singh [1980] 124 ITR 40 (SC), held that los....
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.... assessee, that the source need not be specified or, in any case, the same is itself a source! How could that be? That would be putting the cart before the horse. Even as explained by the Hon'ble Courts, it is only where a source is specified; rather, shown, by the assessee, that the head of income under which it falls and, consequently, the computational provisions governing its determination, ascertained, leading to the income being computed under a particular head. The assessee, despite stating of being in the petrol business, did not adduce any material in support and, rather, even so, ascribed the source of the cash found on him as provided to him by friends and relatives for investing in his new petrol business venture in Kerala. That is, even going by the wholly unsubstantiated story, the sum is not part of his business, itself un-evidenced, but sourced from others (for his new, to be established, business venture). That is, admittedly the source is not either his labor or an income yielding (or otherwise) asset per se, or even withdrawn from his existing business, but, admittedly, unspecified persons. That is, much less shown, the source is not even specified, resulting in ....
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....ist of which is attached, are his clients, who had approached him on 1/7/2016 with cash for purchasing gold. That is, the story gets a fresh turn once again, i.e., another volte face. Even as observed by the Bench during hearing, the assessee returning the cash found with him as his income is itself an admission of being unable to explain its source, even as explained per his letter dated 26/7/2016 to the Dy. Director (Inv.). Two, and equally importantly, the said evidence is not in support of the assessee's return, but in contradiction thereto. Thirdly, there is no explanation for the delay. On each of these grounds, the assessee's plea stands to be rejected at the threshold. The same ought to have been filed before the DDI, or even the AO, years ago, i.e., on Sh. Ramesh and, in turn, his clients being informed of their cash being seized, who could subject them to cross-examination, including verification of their accounts. The only manner in law in which the assessee could amend his return, a legal document bearing his verification, is by filing a revised return, which is in fact impermissible in reassessment proceedings. The return stands filed on 12.10.2018, i.e., over two year....