TaxTMI 
TaxTMI 
2026 (4) TMI 1925
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....Delhi-110005 is a holder of Permanent Account Number (PAN) AGQPK0737J. The assessment order dated 17.05.2021 has been reproduced by the Commissioner of Income Tax (Appeals) [in short CIT(A)] in his order dated 16.02.2024. 3. Facts as per the Assessment order reveal that on 07.03.2017, the police authorities at Shahjahanpur, Uttar Pradesh intercepted a bus coming from Lucknow and bound for Delhi on the basis of secret information and seized cash amounting to Rs. 68,47,000/- along with some contraband substance described as "brown sugar" from four persons namely Mujahid, Shadab, Taufeek and Deepu Goswami. During interrogation, the said persons disclosed that the seized cash belonged to Aabid Ali Khan (i.e. the Appellant herein). Consequently, the matter was reported to the Income Tax Department. 4. On receipt of this information, the Investigation Wing authorized ITO, Shahjahanpur to inquire into the matter and furnish a report. The enquiries revealed that cash amounting to Rs. 68,47,000/- seized by the police from Muzahid and Sahdab belonged to the appellant. 5. During enquiries, Shahdab and Muzahid made statements to the effect that on 07.03.2017, they brought an amount of....
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....rranging the funds for the bona fide purpose of purchasing a property. In support of his contention, two loan sanction letters both dated 12.01.2017 was also furnished which reflect that Aabid Ali Khan and his son Sajid Choudhary had taken loans total amounting to Rs. 10,14,000/-. 10. The Assessing Officer was of the view that the appellant failed to explain the source of Rs. 68,47,000/- seized by the police on 07.03.2017. He noted that there is no reason as to why so much cash was required to be brought from Delhi to complete the deal, when the appellant himself had an office at Hazratganj, Lucknow and could have easily transferred the amount to his Lucknow office. 11. Further no reason was given by the assessee i.e. Aabid Ali Khan as to why all the seventeen persons had given him money in cash after making cash withdrawals from their bank accounts, and not through banking channels because all of them had their own respective bank accounts. 12. The Assessing Officer was of the view that the money being carried was not for the purpose of purchasing the property at Lucknow as claimed by the appellant as he did not even know the exact quantum of the amount. 13. Observing ....
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.... i) When only cash of Rs. 68,47,000/- was seized, there was no justification for an addition of Rs. 80,42,100/- and that at the best Assessing Officer should have made addition of Rs. 68,47,000/- only instead of Rs. 80,42,100/-. ii) The CIT(A) did not consider the loan sanction letter for the gold loan of Rs. 10,14,000/-. iii) The CIT(A) did not consider the fact that the joint acquisition of property by pooling resources is a well-accepted practice within the Muslim community. The Assessing Officer failed to issue notices under Section 131 of the Act to summon and examine the contributors, whose names and affidavits along with the bank accounts had been placed on record. iv) When the assessee had provided prima facie evidence regarding the identity of the persons and the sources of the pooled money, the burden was shifted to the Department to verify the same, which the Assessing Officer could have done by making enquiries from the said persons. Further, the affidavits of those persons could not have been brushed aside without cross-examination. 20. The ITAT answered by holding that it is difficult to accept that as many as seventeen persons helpe....
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....nteen persons were furnished to the Assessing Officer, he was required to issue notices under Section 131 of the Act to verify the truthfulness of those evidences. It is argued that by submitting the affidavits and the statement of bank accounts, the appellant had shown the source of the money. 26. Learned counsel for the appellant argued that the relevant entries have been highlighted in the statement of bank accounts of those seventeen persons, which shows how the money was collected in accordance with prevalent Muslim practices. 27. The appellant has placed on record Annexure P-4, which is a chart showing the names of lenders who had give the money to the appellant, after withdrawing the amounts from their bank accounts. A bare look at this chart itself shows that the cash withdrawals span a long period from April 2016 to February 2017. Furthermore, a cursory look at the statements is enough to hold that the amount of cash withdrawals is actually much less than as claimed by the appellant and therefore, does not match with the claims made in the affidavits. 28. This is the reason that Assessing Officer has specifically mentioned that the appellant did not give details a....
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....lant, the Assessing Officer had no reason for verifying the details of the said gold loan. Neither the onus shifted to the Department, nor there was any need for cross examination of these contributors by the Assessing Officer. 33. So far as the question of joint procuring of money for purchase of property is concerned, the same could have been considered, had the Appellant offered a satisfactory explanation. Moreover, the Appellant did not produce even a single person out of the seventeen persons before the Assessing Officer. We could have accepted the plea that it was not possible to bring seventeen persons from Delhi to Bareilly before the Assessing Officer due to distance but all these seventeen persons (except Muthoot Finance Ltd.) were either his family members or his close circle friends. It does not appeal to reason that the appellant could not even produced some of them before the Assessing Officer. The Assessing Officer was therefore, justified in not accepting the explanation of the appellant. 34. Now we come to the issue as to whether the Assessment Officer should have made addition of Rs. 80,42,100/- or Rs. 68,47,000/- to the income of the appellant. 35. We ha....