TaxTMI 
TaxTMI 
2025 (3) TMI 1942
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.... directives regarding investigation of sources of income. 2. On fact, in the circumstances of the case and in law, the Authorities below erred in upholding the assessment making an addition u/s 69A of the Act to the extent of Rs. 18,65,000 in absence of any incriminating cogent material but based only on seizure of the said cash by authorities without considering the statement explaining the nature and source of same by the appellant. 3. On fact, in the circumstances of the case and in law, the Authorities below erred in rejecting the explanation of the appellant on the source of cash deposits as the legitimate and the only known source of income i.e. the business income of the appellant by passing a vague order. 4. On fact, in the circumstances of the case and in law, the Authorities below erred in invoking the provisions of section 115BBE of the Act without weighing not appreciating that the Appellant has discharged the primary onus cast upon him under section 69A of the Act without discharging the secondary onus shifted on them to prove otherwise. 5. On fact, in the circumstances of the case and in law, the Authorities below erred in invoking ....
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....ubmitted that, the assessee is deriving income from house property, income from other sources and income from business of scrap dealing and plastic granules. The assessee did not maintain any books of account and therefore, the income was offered by declaring net profit @ 20% of the said turnover of Rs. 18,65,000/-. The learned AR has further submitted that the assessee is a very small businessman and employed the minimum capital in the business of scrap and plastic granules which is the source of earning. Since the assessee is dealing in the business of scraps and plastic granules and dealing with unorganized customer, therefore, the assessee is not maintaining any record of the business transactions. Thus, the learned AR of the assessee has submitted that once the assessee has explained the source of cash as the Revenue from the business of retail business in scrap and plastic granules, which was accumulated and kept at home. On the fateful day, the assessee was carrying the same for depositing in the Deposit Machine but on the way, the police authorities intercepted the assessee's vehicle and seized the cash. Hence he has prayed that the addition made by the Assessing Officer an....
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.... evidence does not inspire confidence, has not been explained by the assessee. Further, the assessee has admitted the fact that he is not maintaining any record as well as books of account of any of the business transactions and declared the regular business income at Rs. 4,25,000/- and income from the seized cash @ 20% at Rs. 3,73,000/- separately in the return of income which itself goes to prove that this cash was not generated from the regular business activity of the assessee. The learned CIT(A) has decided this issue in para 6 to 6.5 as under: 6. Decision: This appeal is directed against the assessment order dated 29.03.2022, passed under Section 143(3) of the Income Tax Act, 1961 (the Act) by the Assistant Commissioner of Income Tax (ACIT), Central Circle-2(3), Hyderabad. The appeal pertains to the additions made towards unexplained cash amounting to Rs. 18,65,000/- under Section 69A and the estimation of profits at Rs. 3,73,000/-. The appellant has challenged the taxability of the cash under Section 69A and the applicability of Section 115BBE for a higher rate of tax. The grounds raised by the appellant have been duly considered and adjudicated as follows: ....
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....ated business receipts-was unsupported by any documentary evidence, such as books of accounts, receipts, or bank statements. The appellant's reliance on the argument that the cash forms part of business income is misplaced, as mere declarations without evidence cannot justify such treatment. The Section 69A empowers the Assessing Officer to treat cash as income where the source remains unexplained. The conditions under this section were met as the appellant failed to justify the source satisfactorily. The Assessing Officer has rightly invoked Section 69A, as the onus to prove the source of the cash lies with the appellant, which was not discharged. The decision to apply Section 115BBE is legally tenable and in line with established jurisprudence. The decision to tax the amount under Section 115BBE aligns with the legislative intent to prevent tax evasion by taxing unexplained income at a higher rate. Hence the aground of appeal no. 1 and 2 are dismissed. 6.3 In Ground No. 3 & 4, the appellant has challenged rejection of the estimation of profit done by the AO and addition of entire cash seized. The appellant sought to include only the profit portion of Rs. 3,7....