DCIT Vs Biharilal Shadhuram Chhabriya (ITAT Nagpur)
ITAT Nagpur held that application of section 69A for addition towards unexplained money misconceived as assessee was not found owner of any money or valuable. Also held that in case of search proceedings, there cannot be any extrapolation of income unless it is backed by cogent and reliable evidence.
Facts- The assessee is an individual engaged in the business as finance broker and earns income from brokerage for arranging loans on behalf of borrower from the lender. During the course of assesses business operations, movement of funds is directly from lender to the borrower i.e., lending takes place on Principal to Principal basis between the lender and borrower and the assessee had disclosed his brokerage income.
Post search operation, AO made addition towards unexplained money under section 69A of the Income Tax Act. CIT(A) granted full relief to the assessee. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that in case of search proceedings, there cannot be any extrapolation of income unless it is backed by cogent and reliable evidence. Application of section 69A of the Act was also misconceived according to him because the assessee was not found owner of any money or valuable.
