TaxTMI 
TaxTMI 
2026 (8) TMI 672
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.... ii. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the part addition of Rs. 8,87,400/- u/s 69A of the Income Tax Act, 1961 out of Rs. 16,64,500/- by treating the cash found during search as unexplained money, without properly appreciating the facts, evidences, and explanations furnished by the appellant. iii. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in rejecting the detailed explanation submitted by the appellant related to cash belongs to his family members (i.e. mother and minor children's), which clearly explained the nature and source of cash found during search. iv. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming addition of Rs. 4,80,600/- allegedly belonging to the appellant's mother by holding that lifetime savings cannot be accumulated in cash, which is based on assumptions, presumptions, and general observations, and not on any material evidence. v. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming addition of Rs. 4,06,800/- relating to minor children's savin....
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....by the cash book. iii. Mr. Onkardas Bansilal Chandak (father) Cash in hand of Rs. 8,05,400/-, originating from an opening balance of Rs. 5,80,679/- as on 01/04/2021, supplemented by agricultural income of Rs. 2,76,600/- and bank withdrawals of Rs. 25,000/-, corroborated by the cash book. iv. Mrs. Kanta Chandak (mother) - Cash in hand of Rs. 4,80,600/-, representing her lifetime savings as a senior citizen. Being a nonearning individual below the taxable threshold, she was neither required to maintain books of account nor file statutory returns of income. v. Miss. Itisha Chandak (daughter) - Cash in hand of Rs. 2,25,300/-, representing accumulated customary gifts (shagun) received from relatives on various social occasions over time. vi. Master Rishik Chandak (son) Cash in hand of Rs. 1,81,500/-, similarly representing minor savings accumulated through customary family gifts. 3. The Assessing Officer, however, remained unconvinced and summarily brushed aside the Assessee's explanations. The AO observed that since the Assessee had filed his return under the presumptive taxation scheme of Section 44ADA and did not maintain regular books, the cash....
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.... the cash seized of Rs. 16,64,500/- is added to the total income u/s. 69A of the I.T.Act, 1961. Penalty proceedings u/s. 271AAC(1) of the I.T.Act, 1961 are initiated separately. Penalty proceedings u/s. 271AAB(1A)(b) of the I.T.Act, 1961 are also separately initiated. 4. Aggrieved, the Assessee preferred an appeal before the Ld. CIT(A). The ld First Appellate Authority, upon evaluation of the evidences, partly accepted the Assessee's contentions. He accepted the availability of cash in the hands of the Assessee (Rs. 1,78,200/- ), his wife (Rs. 43,500/-), and his father (Rs. 8,05,400/-), taking due note of their past tax returns and filing histories. Consequently, the Ld. CIT(A) deleted the addition to the extent of Rs. 7,77,100/-. However, the Ld. CIT(A) sustained the remaining addition of Rs. 8,87,400/- relating to the mother and the minor children, observing inter alia: "7.3.1. It is noticed that the assessee did not and could not explain the sources of cash to the extent of Rs. 16,64,500 seized out of the cash found of Rs. 19,14,500 at the time of search on 23.09.2021. Indeed, non-explanation for the sources was the reason for seizure of Rs. 16,64,500. During post se....
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.... assessee's claim with regard to children receiving cash gifts is rejected and hence the addition to the extent of Rs. 4,06,800 (Rs.2,25,300 + Rs. 1,81,500) is confirmed. 7.3.4. The assessee could not explain what could be the sources of his mother's lifetime savings especially because she did not have her own sources of income at all. Further, it is understandable if some old jewellery of her mother was found in his house and thereby that reasonable relief could be granted on that count considering the custom that the women must have been wearing the daily usage jewellery. But what was claimed to belong to the assessee's mother is not jewellery but cash. Cash would never get accumulated over someone's lifetime only to be found at the time of search. Moreover, she did not have any independent sources of income as no Rols were filed by her but rather she was dependent on the assessee being her son. Therefore, the assessee's claim with regard to mother having lifetime savings of Rs. 4,80,600 is rejected and hence the addition to the extent of Rs. 4,80,600 is confirmed. 7.3.5. The assessee claimed that sum of Rs. 8,05,400 belonged to his father an....
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....itizen, was saving money out of the household expenses and which was kept in the form of stridhan, and therefore, no reason to doubt the availability of a sum of Rs. 4,80,600/- in the hands of a senior citizen. Similarly, Ld. Council submitted that in respect of the availability of the cash of Rs. 2,25,300/- and Rs. 1,81,500/- in the hands of minor daughter Itisha Chandak and minor son Rishik Chandak respectively was also explained during the course of search proceeding as out of the money received from gifts on various occasions. Ld. Counsel submitted that in view of the customary tradition, it is not impossible that two children might have possessed such a small amount in their hands. Learned CIT(A) has merely sustained the addition in respect of source of money explained in the hands of his mother and minor children only for the reason that they did not file return of income for the year under consideration. The learned counsel submitted that the assessee has declared return of income in his hand, which is sufficient to even explain the money against the minor children. 5.1 Ld. Counsel alternatively also submitted that in AY 2019- 20, addition for cash amounting to Rs. 20,60,....