TaxTMI 
TaxTMI 
2026 (6) TMI 1135
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....e are that the assessee is an individual, who filed his return of income (RoI) for AY 2020-21 on 09.01.2021 declaring total income of Rs. 13,25,790/-. A search and seizure operation u/s. 132 of the Income Tax Act, 1961 (in short "the Act") was conducted in the case of the assessee on 04.06.2019. During the course of search, at the residential premises of the assessee an amount of Rs. 1 Cr. cash and '12' gold biscuits weighing '1200' grams were also found. When assessee was asked about the source of cash, he stated that cash belongs to himself and his family proprietary concerns i.e. M/s. Ankit Industries, M/s. Ankit Marketing & M/s. Brijwasi Industries. The assessee had also furnished cash book of above three firms and as per the cash book which was referred to in Q.No.13 of statement recorded during the course of search cash balance was at Rs. 6,73,805/-. The assessee further stated that he was unable to explain source and supporting documents for the above cash. Similarly, in respect of '12' gold bars found during the course of search, he expressed his inability to explain the source and documentary evidence for the gold and admitted, additional income of Rs. 39,84,000/- in respe....
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....nd amounting to Rs. 1,39,84,000/- and thus, rejected the explanation of the assessee and added back to the total income treating as unexplained and taxed u/s. 115BBE of the Act. 6. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee has filed detailed submissions on the issue which has been reproduced at Para No.5 at Page Nos.14-16 of the order of the Ld.CIT(A). The sum and substance of the explanation of the assessee before the Ld.CIT(A) is that source for cash of Rs. 1 Cr. found during the course of search has been explained out of cash balance available with '9' family members for which the assessee has furnished affidavit along with their Permanent Account Number (PAN). The assessee further submitted that, he purchased 12' gold bars in '3' financial years and the same is recorded in his books of accounts. The Ld.CIT(A) forwarded the written submissions of the assessee along with additional evidence to the AO for its comments and the AO, in the Remand Report dated 28.04.2025 once again rejected explanation with regard to source of cash and gold bullion found during the course of search. 7. The Ld.CIT(....
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....ed in 1981 (2) SCC 460, the additions made by the AO can't be upheld. The Ld. Counsel for the assessee further submitted that the assessee has explained source of cash deposits found during the course of search out of cash available with '9' family members including three proprietary concerns. The assessee had also furnished affidavit along with confirmations from the parties. The AO summarily rejected the evidence submitted by the assessee and made additions. The Ld. Counsel for the assessee further submitted that '12' gold bars found during the course of search were purchased in previous financial years and the same has been recorded in the books of accounts. Further, once the purchase is recorded in the books of accounts, the source stands explained. Therefore, the Ld.CIT(A) was erred in observing that the assessee has failed to explain purchase of gold bullion. Therefore, he submitted that the additions made by the AO and sustained by the Ld.CIT(A) should be deleted. In this regard, he relied upon the following judicial precedents: * Govind Saran Gagan Saran Vs. Commr of Sales tax-Case Laws [in Civil Appeal No.2083 of 1974 dated 26.04.1985] * Umarcharan Shaw a....
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....urther, the case law referred to by the Ld. Counsel for the assessee including the decision of the Hon'ble Supreme Court in the case of B.C. Srinivas Setty (supra) are rendered under different sets of facts and therefore, can't be applicable to the facts of the assessee's case. Therefore, we reject the legal ground taken by the assessee challenging the addition. 13. Having said so, let us come back to the additions made by the AO for Rs. 1,39,84,000/-. Admittedly, during the course of search by the GST authorities' cash of Rs1 Cr. was found. Pursuant to GST search, the department has initiated proceedings u/s. 132 & statement u/s. 132 (4) of the Act was recorded from the assessee. The assessee failed to explain cash of Rs. 1 Cr. except filing cash book extract of three proprietary concerns i.e., M/s. Ankit Industries, M/s. Ankit Marketing & M/s. Brijwasi Industries and as per the cash book extract, cash balance was available with proprietary concerns as on 04.06.2019 was Rs. 6,73,805/-. At the time of assessment proceedings, the assessee come out with a new version of arguments and claimed that cash found during the course of search, was belongs to '9' family members including t....