Under s.69A, seized cash explanations require credible proof of identity, creditworthiness, genuineness, and nexus; agricultural sales and cash gifts rejected for lack of exclusive entitlement, transportation evidence, donor capacity despite documents.

आदेश/ORDER

PER MANU KUMAR GIRI, Judicial Member:

This captioned Appeal filed by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), Chennai-19, [CIT(A)] dated 29.04.2025 for Assessment Year 2020-21.

2. The assessee has raised the following grounds of appeal:

1. The learned CIT(A) has grossly erred in upholding the addition of Rs 10,84,977/- u/s. 69A of the Act as unexplained money, without properly appreciating the evidence, documents, and explanations placed on record by the Appellant.

2. The learned CIT(A) has failed to appreciate that the cash seized to the extent of Rs.6,90,000/-was duly explained from agricultural income, supported by sale bills, land ownership records, and other corroborative documents, and rejection of such evidence is arbitrary, baseless, and against the principles of natural justice.

3. The learned CIT(A) has erred in law and on facts in dismissing the explanation regarding cash gifts of Rs.3,85,000/- received from Appellant's father and uncle, despite submission of valid notarized gift deeds, and without affording sufficient opportunity to substantiate the creditworthiness and genuineness of the donors.

4. The learned CIT(A) has erred in placing unwarranted reliance on presumptions, conjectures, and surmises in disregarding the agricultural income and gifts, contrary to settled judicial precedents that no addition can be made merely based on assumptions.

5. The learned CIT(A) has erred in confirming the initiation of penalty proceedings u/s.271AAC(1) and section 270A of the Act, which are premature, unwarranted, and unsustainable in law as no valid addition survives after considering the genuine explanation of the Appellant.

6. The learned authorities below have violated the principles of natural justice by not affording reasonable and sufficient opportunity of being heard before making adverse additions, thereby rendering the assessment order and appellate order invalid and liable to be quashed.

The Appellant craves leave to add, alter, amend, or withdraw any ground of appeal at the time of hearing.

3. Brief facts of the case: In the course of election-related surveillance, information was received from the Assistant Returning Officer, Salem Parliamentary Constituency, and the Revenue Divisional Officer, Salem, that the appellant had been found in possession of Rs.49 lakhs by the Flying Squad Officer. Consequently, summons u/s. 131(1A) of the Act were issued to the appellant on 18.05.2019, and his statement was recorded. In the said statement, the appellant asserted that the sum of Rs.49 lakhs represented business funds intended for the purchase of goods from Tirupati. However, he failed to furnish any documentary evidence in support of this explanation. Accordingly, a search u/s. 132 of the Act was carried out in the appellant’s case on 18.05.2019, during which Rs.49 lakhs in cash and certain sales bill books were seized.The appellant filed the return of income for the relevant assessment year on 31.03.2021, declaring a total income of Rs.25,58,660/-. Thereafter, assessment proceedings were initiated by issuance of notice u/s. 143(2) of the Act dated 29.06.2021. The assessment was subsequently completed u/s. 143(3) read with Section 153A of the Act on 25.09.2021, determining the total assessed income at Rs.55,58,660/-. Aggrieved by the said assessment order, the appellant has preferred appeal before the CIT(A) who passed following order:

6. Decision:

6.1. Ground no. 1 & 2:

6.1.1. These grounds raised by the appellant are aga