Back
2026 Supreme(Online)(ITAT) 9712
INCOME TAX APPELLATE TRIBUNAL (MUMBAI BENCH)
Sandeep Gosain, Judicial Member, Bijayananda Puruseth, Accountant Member
DCIT CC 5 1 Mumbai – Appellant
Versus
Nalin Jagdishkumar Gupta – Respondent
ITA No. 2674/Mum/2025
For the Appellants/Petitioners: Vivek Perampurna
For the Respondents: K Shivram
Section 69A of the Income Tax Act cannot be invoked to treat seized bullion as unexplained income when the assessee provides valid documentation, supplier confirmation, and records demonstrating that the assets were acquired through banking channels and entered in the company's books of account.
Headnote:(A) Income Tax Act, 1961 - Section 69A - Unexplained money - Gold bullion seizure - Search and seizure proceedings - Assessee disclosed ownership of gold as assets recorded in books under 'Plant & Machinery' - Revenue made protective addition - CIT(A) deleted addition on grounds that ownership was established by the company and sources were accounted - Tribunal upheld the deletion as the Assessing Officer's case was based on presumptions and ignored evidence corroborated by suppliers regarding purchase through banking channels and market practices - No evidence existed to support cash purchase theories.
Facts of the case:
During a search on the business premises and residential premises of the group promoters, gold bullion was seized. The Assessing Officer added the value of the gold as unexplained income under Section 69A in the hands of the assessee. The assessee contended that the gold belonged to the infrastructure development company and was duly recorded in its books of accounts under 'Plant & Machinery', backed by bills and banking channel payments.
Findings of Court:
The Tribunal found the Assessing Officer’s reliance on WhatsApp chats and suspicious presumptions regarding cash purchases insufficient to override the documented evidence. The suppliers confirmed the sales, and the company confirmed ownership, rendering the protective addition in the assessee's hands unjustified.
Issues: Whether the gold bullion found during the search constitutes unexplained income under Section 69A in the hands of the assessee, and whether the CIT(A) was justified in deleting the protective additions made by the Assessing Officer.
Ratio Decidendi: If an asset is found to be recorded in the books of accounts and its source of acquisition is explained through banking transactions and confirmed by suppliers, it cannot be treated as unexplained under Section 69A, even if the storage location at a director's residence is deemed unusual by the Assessing Officer.
Result: Revenue appeal dismissed.
| Table of Content |
|---|
| 1. appellate authorities correctly delete protective additions when ownership and source of seized assets are established. (Para 1 , 2 , 3 , 4 , 5 , 6) |
| 2. assessment under section 69a requires objective evidence, not mere presumptions or surmises by the assessing officer. (Para 7) |
| 3. appeals against deletion of unjustified protective additions are dismissed when factual findings are robust and unrebutted. (Para 8 , 9) |
PER SANDEEP GOSAIN, JM:
The present appeal has been filed by the Revenue challenging the impugned order dated 18.02.2025 passed u/s 250 of the Income Tax Act, 1961 ('the Act'), by the Office of the Commissioner of Income Tax, Appeal, CIT(A) 53, Mumbai for the assessment year 2023-24. The following grounds as raised by the Revenue are reproduced below:
1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in providing relief on the issue of unexplained money on account of Gold Bullion seized during the search by deleting the addition of Rs. 22,08,62,400/-(Value of Gold Bullion seized from the premises of the assessee), on protective basis by ignoring the facts and circumstances of the case established by the Assessing Officer.
2. The appellant craves leave to add, delete, modify the grounds of appeal before or at the time of hearing.
2. As per the facts of the present case Assessee is the Director of M/s J Kumar Infrastructure Project Limited engaged in the business of infrastructure development like roads, flyovers, etc. for the hearing under consideration, the Assessee had filed his return of income declaring total income of Rs. 8,40,43,000/-. A search action had taken place on various premises of J Kumar group on 11.10.2022 and subsequently assessment order was passed u/s 143(3) of the Income Tax Act thereby making addition u/s 69(A) of the Income Tax Act.
3. Aggrieved by the said order, Assessee preferred appeal before Ld. CIT (Appeal) and Ld. CIT (Appeal) while deleting the additions, partly allowed the appeal of the Assessee. Aggrieved by the said order Revenue has now preferred the appeal before us on the ground mentioned hereinabove.
4. The solitary grounds raised by the Revenue relates to challenging the order of Ld. CIT (Appeal) in providing relief to the Assessee on the issue of unexplained money on account of gold bullion seized during the search by deleting the additionson protective basis.
5. We have heard the counsels for both parties, perused the material placed on record, the judgments cited before us, and the order passed by the Revenue Authorities. From the records, we noticed that the substantive additions have already been made in the hands of J Kumar Infra. Projects Limited in ITA no. 2137/Mum/2025.
6. As per the facts of the present case there is no dispute with regard to the ownership of the gold seized, which admittedly belongs to the company i.e. M/s J Kumar Infra Projects Limited and even the said company had categorically confirmed the ownership of the gold, therefore, in view of the undisputed facts Ld. CIT(A) had rightly concluded that the protective addition made in the hands of the Assessee is wholly unjustified and thus deleted the same.
7. The operative portion of Ld. CIT (Appeal) is contended at para no. 4.13 at page no. 24 to 36 of its order which are produced herein under;
4.13 Decision for Ground no. 1
I have considered the facts of the case. AO has made substantive addition in the hand of J. Kumar Infraprojects Limited for A.Y. 2023-24, I have deleted the said addition in view of the following finding:
"8.28 DECISION for Ground No. 5:
8.28.1 The issue is regarding addition u/s 69A being Gold bullion weighing 57.7 kg found from different persons covered u/s 132 of the Act who have stated the same to be of the appellant herein. The appellant also agreed that the same belong to it and stated that the same is recorded in the books of accounts purchased in earlier years and shown under the head 'Plant & Machinery'. It is also undispute
