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2024 Supreme(Online)(ITAT) 2811
INCOME TAX APPELLATE TRIBUNAL (AHMEDABAD BENCH)
MRS. ANNAPURNA GUPTA, ACJ, SHRI SIDDHARTHA NAUTIYAL, J
PANKAJKUMAR AMARAM PRAJAPATI – Appellant
Versus
Commissioner of Income-tax (Appeals), Ahmedabad-12 – Respondent
IT(SS)A No. 74/Ahd/2022
For the Appellant: Shri Kalpesh Shah, AR
For the Respondent: Dr. Darsi Suman Ratnam, CIT-DR
Unexplained cash must be substantiated with proper evidence; seized assets cannot offset advance tax liabilities under the Income Tax Act.
Headnote:(A) Income-tax Act, 1961 - Section 250(6) - This appeal involves assessment year 2019-20 and addresses unexplained cash addition of Rs. 4,11,500/-, confirmed by CIT(A). The court considered evidence and explanations regarding cash sourced from multiple origins - Under section 69A, burden of proof is on the taxpayer to substantiate any claims. (Paras 2-10)
(B) Adjustment of seized assets against tax liabilities - Seized cash cannot be adjusted against advance tax. The legal framework specified provisions for managing seized assets, which excludes self-assessment tax. The taxpayer failed to provide sufficient evidence for claims made regarding cash origins. (Paras 14-24)
Facts of the case:
The appellant was involved in invoking a delay in filing an appeal due to lack of awareness and financial inability. The core issue involved cash discovered during a search operation which was claimed to have been unaccounted income explained variably.
Findings of Court:
The explanation of cash contributions was insufficiently corroborated and thus rejected. A part of the claimed cash source was accepted, based on historical financial documentation previously assessed and accepted by the tax department.
Issues: Whether the appellant's claims regarding sources of unexplained cash are credible, and the implications of seized cash adjustment against advance tax liabilities under law.
Ratio Decidendi: The assessing authority's ruling emphasized that assertions require robust corroboration; hence, claims lacking evidence are non-viable under section 69A. Adjustments for seized cash adhere strictly to statutory frameworks and do not permit personal assumptions of advance tax liabilities. (Paras 18-23)
Result: The appeal is partly allowed.
| Table of Content |
|---|
| 1. delay in appeal filing due to lack of awareness. (Para 1 , 2 , 3) |
| 2. unexplained cash addition failed to meet evidentiary standards. (Para 4 , 5 , 6 , 9) |
| 3. adjustment principles for seized assets clarified. (Para 10 , 12 , 20) |
आदशे/ORDER
PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER:
Present appeal has been filed by the assessee against order of the Commissioner of Income-tax (Appeals), Ahmedabad-12 [hereinafter referred to as "CIT(A)" for short] dated 25.03.2022 passed under Section 250 (6) of the Income-tax Act, 1961 [hereinafter referred to as "the Act" for short], for the Assessment Year (AY) 2019-20.
2. At the outset, it is noted that there is a delay of 217 days on the part of the assessee in filing the appeal before the Tribunal. In this regard, the assessee has filed an application dated 23.12.2022 seeking condonation of the said delay on the following grounds:-
“To
The Income Tax Appellate Tribunal,
Ahmedabad Benches, Ahmedabad
Respected Sir,
PAN No.: AIDPP6641H - Assessment Year: 2019-2020
Sub: Application for condonation of delay in filing of the appeal.
The appeal is filed late by 276 days. The delay is due to the fact that the assessee was not aware of the procedure of filing appeal before ITAT. The assessee is a father of two school going children and responsible to take care of them, after the sad demise of his wife at a very early age. Assessee has no occupation or employment for the last two or three years. Further the assessee did not had money to pay the filing fees of Rs 10000/-. Under the circumstances the appeal is filed late. The assessee request your good office to confine the delay and decide the appeal on merit and oblige.
Thanking you,
For, PANKAJKUMAR AMARAM PRAJAPATI
Sd/-
(Appellant)
Ahmedabad, 23/12/2022”
Keeping in view the reason given by the assessee in his application for condonation of delay, we are satisfied that there was a sufficient cause for the delay of 217 days on the part of the assessee in filing the appeal before the Tribunal and even learned DR has not raised any material objection in this regard. We, therefore, condone the said delay and proceed to dispose of the appeal of the assessee on merit.
3. Both the parties heard on the grounds raised in the appeal before us. Ground Nos. 1 to 3, the ld. Counsel for the assessee contended, related to addition made to assessee’s income on account of unexplained cash/money amounting to Rs.4,11,500/- which was confirmed by the ld. CIT(A). The grounds read as under:-
“1. The Learned AO and CIT Appeal has erred in passing order based on doubt, surmise and conjecture, rather than on cogent material or evidences. The order is bad in eyes of law and need to be annulled.
2 In law, on the facts and circumstances of the case, the Ld. CIT Appeals grossly erred in confirming the action of Assessing officer without taking into account the explanations offered by the Assessee alongwith supporting evidences.
3. The Learned AO and CIT Appeal has erred in passing order based on doubt, surmise and conjecture, rather than on cogent material or evidences.”
4. The facts relating to the case, as noted from the assessment order, are that a search and seizure action u/s. 132 of the Act and Survey u/s 133A of the Act was carried out on 06.10.2018 in the cases/groups managed by Shri Arvindbhai Sahnkarbhai Prajapati. It was gathered that Shri Arvindbhai Sahnkarbhai Prajapati indulged in transferring cash from one city to another (Hawala Transactions). Search warrant was issued to Shri Satish Ramanbhai Patel and Shri Pankajkumar Rameshbhai Patel on Maruti Ertiga Vehicle having registration No. RM4-UF-5955 at Swaroop Ganj Police Station, District-Sirohi, Rajasthan. During the course of the search action, cash of Rs.3,50,00,000/- was found hidden under gearbox of the said car in a cavity. Another search warrant was issued on Pankajkumar Prajapati, the assessee before us, at Shop No 14, Shrikrishna Complex, Old Modern Cinema, Gandhi Road, Ahmedabad wherein incriminating material a
