Smt. Bhawna Babbar Vs ACIT (ITAT Delhi)
The issue under consideration is whether A.O. and CIT is correct in making an addition u/s 69 for cash found during search in bank locker?
The assessee explained that the cash so found in the locker was received as gifts on the occasion of marriage and subsequent ceremonies of her younger daughter. Assessing Officer was not satisfied with the source of opening cash balance and hence addition has been made.
CIT(A) held that the custom prevailing in an Indian Hindu family and also considering the status of the assessee’s family, a part of the cash found can be treated as explained, being gifts and balance amount will be added as unexplained income u/s 69.
ITAT state that it is true that the findings of the Id. CIT(A) are not only illogical but also do not find any place in the law of Income tax. It is equally true that the onus is upon the assessee to explain the possession of cash found at the time of search. Therefore, ITAT considered that, the burden of proof is more when cash is found in the locker of a bank and not found deposited in the bank account. Considering the status of the appellant’s family, her life style and standard of living, vis a vis returned income. Lower authorities have already given substantial relief in respect of cash found from the locker. Therefore, addition made by AO was sustained.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] – 23, New Delhi dated 30.08.2017 pertaining to assessment year 2015-16.
2. The grievance raised by the assessee in this appeal is two fold – firstly, the assessee is aggrieved by the confirmation of addition of Rs. 1,02,800/- in respect of cash found during the course of search and, secondly, the assessee is aggrieved by the confirmation of addition of 19,48,159/- in respect of jewellery found during the course of search.
3. Briefly stated, the facts of the case are that search operation u/s 132 of the Income-tax Act, 1961 [hereinafter referred to as The Act] was conducted at the residence of the assessee on 10.03.2015. During the course of search operation, in Locker No, 323 in Canara Bank, New Delhi, cash amounting to Rs. 5,42,800/- was found. The assessee was asked to explain the source of cash in the locker.
4. In her reply, the assessee explained that the cash so found in the locker was received as gifts on the occasion of marriage and subsequent ceremonies of her younger daughter Ms. Ankita Goyal. During the course of assessment proceedings, the assessee submitted copy of cash book. After considering the contents of the cash book, the Assessing Officer was not satisfied with the source of opening cash balance of Rs. 15,93,300/-. The Assessing Officer refused to entertain the claim of gifts on ceremonial functions. However, considering the status of the assessee, the Assessing Officer made addition of Rs. 5,42,800/- as unexplained cash.
5. The assessee agitated the matter before the Id. CIT(A) and reiterated her claim of having received gifts at the time of various ceremonial functions.
7. After considering the facts and submissions, and the custom prevailing in an Indian Hindu family and also considering the status of the assessee’s family, the Id. CIT(A) observed that a part of the cash found can be treated as explained, being gifts. However, the Id. CIT(A) concluded by holding that looking at the status of the family, 4,40,000/- being round figure of 16% of income declared by the appellant and her husband, is treated as explained being gift received at the time of marriage and subsequent ceremonies of appellant’s daughter, confirmed the balance addition of Rs. 1,02,800/-.
8. Before us, the Id. AR vehemently stated that there is no logical reasoning given by the Id. CIT(A) in confirming the balance addition of 1,02,800/-. It is the say of the Id. counsel for the assessee that application of 15% of the declared income of the assessee and husband is not only illogical but also do not find any place in the law of Income tax.
9. Per contra, the Id. DR supported the findings of the lower authorities.
10. We have carefully perused the orders of the authorities below. It is true that the findings of the Id. CIT(A) are not only illogical but also do not find any place in the law of Income tax. It is equally true that the onus is upon the assessee to explain the possession of cash found at the time of search. In our considered opinion, the burden of proof is more when cash is found in the locker of a bank and not found deposited in the bank account. Considering the status of the appellant’s family, her life style and standard of living, vis a vis returned income, we are of the considered opinion that the lower authorities have already given substantial relief in respect of cash found from the locker. Therefore, the findings of the Id. CIT(A) upholding the addition of a paltry sum of Rs. 1,02,800/- does not call for any interference. Ground No. 1 is dismissed.
11. Coming to the second grievance which relates to the addition of
19,48,159/- in respect of jewellery found during the course of search proceedings, the facts on record show that the following jewellery was found :
