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2025 Supreme(Online)(ITAT) 6976
INCOME TAX APPELLATE TRIBUNAL (KOLKATA BENCH)
Shri Rajesh Kumar, AM, Shri Pradip Kumar Choubey, JM
Sanjay Kumar Gupta – Appellant
Versus
ACIT, CC 2(1) – Respondent
ITA No.791/KOL/2025 | IT(SS)A No. 50/KOL/2025
For the Appellants/Petitioners: Shri S.K. Tulsiyan, Ms. Sonam Bajoria
For the Respondents: Shri S.B. Chakraborthy
Seized cash can be adjusted against self-assessment tax; provisions for unexplained income do not apply when income source is explained.
Headnote:(A) Income Tax Act, 1961 Sections 132, 153A, 69A, 115BBE - Assessment proceedings - Appeals concerning assessment for AY 2020-21 and 2021-22 - Cash seized during search claimed as business income - Assessee requested adjustment of seized cash against self-assessment tax - Court held that the cash seized is to be adjusted and provisions of 69A and 115BBE not applicable as income source explained - Double addition rejected, assessed income recalculated - (Paras 2 to 12 and 14-15)
(B) Appeal - Adjustment of seized assets against tax liability clarified - Self-assessment regarded as existing liability - Relevant judgments discussed affirming the applicability of adjustments against self-tax liability. (Paras 8, 10 and 12)
Facts of the case:
The appellant engaged in transportation business challenged the assessment where cash of ₹1,35,29,300/- was seized without incriminating material found. The appeal contested the assessment of income deemed unexplained by the AO.
Findings of Court:
The appeal was allowed based on previous assessments and the source of income established from the business transactions, invalidating the application of certain tax provisions.
Issues: Key issues include the validity of adjustments against self-assessment tax and implications of cash seizure.
Ratio Decidendi: The court reasoned that the adjustment of seized cash against self-tax liability is legally sound, noting previous case precedents.
Result: Appeals allowed.
ORDER
Per Rajesh Kumar, AM:
This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Kolkata-26 (hereinafter referred to as the “Ld. CIT(A)”] dated 11.03.2025 for the AY 2020-21 & 2021-22.
02. The facts in brief are that a search u/s 132 of the Act was carried out on the assessee on 05.11.2020. Accordingly, the notices were issued u/s 153A of the Act for the six assessment years prior to the year of search from A.Y. 2015-16 to A.Y. 2020-21. The assessee is engaged in the business of transportation business. The assessee has regularly been filing the return of income for A.Y. 2015-16 to 2019-20, corroborating the fact that the assessee is engaged in the business of transportation. The ld. AO accepted the returns of income for A.Y. 2015-16 to 2019-20 by passing the order u/s 143(3)/ 153A of the Act. Pertinent to state that during the course of search on the assessee at Jamuria Thana More, Bye Pass Road near HDFC Bank, Jamuria 713336, cash amounting to ₹1,35,29,300/-, was seized vide Panchnama dated 05.11.2020. No incriminating material was found during the course of search. The assessee filed the return of income declaring income of ₹48,41,969/-, for A.Y. 2020-21 and ₹91,63,502/- for A.Y. 2021-22 thereby disclosing income in aggregate of ₹1,40,05,471/- in these two assessment years. Accordingly, the income tax liability was computed on the said income which worked out to ₹18,12,600/- for A.Y. 2020-21 and ₹35,27,960/- for A.Y. 2021-22. The assessee claimed the cash seized to be the entire wealth of the assessee and that the seizure of such cash of the assessee had not left any income/ money in his hand. The assessee also requested the ld. PCIT, Central-1, Kolkata by way three letters to allow the appropriation of the said cash seized against self-assessment tax determined by the assessee for assessment year 2020-21 and 2022- 23. These request letters addressed to the PCIT were dated 01.03.2022, 09.03.2022 and 17.03.2022. However, the said cash seized was not appropriated against the self-tax liability and consequently the assessee could not file the returns of income online for both the assessment years. Thereafter, the assessee physically filed these returns of income on 16.03.2022 disclosing the income of ₹48,41,969/- for A.Y. 2020-21 and ₹91,63,502/- for A.Y. 2021-22 along with the a letter before the ld. ACIT, Central Circle 2(1) Kolkata. The ld. AO in the assessment order in para no.2 noted the fact that the assessee vide letter dated 09.03.2022, stated that he wishes to file the return of income u/s 153A of the Act for A.Y. 2015- 16 to A.Y. 2020-21 and also AY 2021-22. The ld. AO also noted that the assessee stated in the said letter that he wishes to disclose 48,41,969/- and ₹91,53,500/- for A.Y. 2020-21 and 2021-22 respectively. It was also noted by the ld. AO that assessee requested the ld. PCIT, Central Circle-1, Kolkata vide various communications to allow the appropriation of seized cash against the self-assessment tax determined by the assessee. In para no.3, the ld. AO noted that the cases of the assessee were picked up for compulsory scrutiny. The ld. AO noted that the assessee has not filed the return of income online and therefore, notice u/s 142(1)of the Act dated 17.03.2022, was issued and served upon the assessee to furnish the return of income for A.Y. 2021-22 and 2021-22. According to the ld. AO, however on CPC portal, no returns of income as filed by the assessee were found. Therefore, the ld. AO noted that the returns of income as given by the assessee in the manual form were not maintainable. Accordingly, the ld. AO issued show cause notice along with questionnaire which were duly served upon the assessee. In reply to the said show cause notice, the assessee furnished the written submission which was duly considered by the ld. AO and extracted from page no.3 to 4. The ld. AO noted that the assessee has furnished the explanation qua the cash seized during the
