Rajesh Bubna Vs ACIT (ITAT Delhi)
ITAT Delhi: Cash of ₹3.11 Cr found in locker is NOT “unexplained” – treated as speculative/business income, Section 69A & 115BBE deleted
Assessee, an individual engaged in trading of chemicals, was subjected to search in the Faquir Chand Lockers & Vaults Group. During search on 06.12.2018, two lockers belonging to Assessee were opened & a total of ₹3.11 crore cash was found. Immediately during the statement u/s 132(4), Assessee clearly explained that the cash was accumulated over time out of speculative trading in food grains, rice, pulses, wheat & oil. He further offered the entire amount as income in the current year under “business/speculative income” in his computation during assessment. However, AO rejected this explanation, held that the cash was not recorded in books, treated it as “unexplained money” u/s 69A, & taxed it at 60% u/s 115BBE. CIT(A) confirmed the addition, even refusing to admit additional evidence & without granting proper opportunity of hearing.
Before the Tribunal, Assessee argued that there is a clear distinction between “undisclosed income” & “unexplained income”. Section 69A is a deeming fiction applicable only where no explanation is given or where AO proves the explanation to be false. In this case, from the very first moment of search, Assessee disclosed the source as speculative trading. He never denied or hid the income; he voluntarily offered it as business income & paid tax. Therefore, once the source is explained, Section 69A cannot be invoked. Further, statements u/s 132(4) have evidentiary value & must be read as a whole, not in isolation.
