Haresh Kumar Mehta Vs ACIT (ITAT Bangalore)
A search & seizure action was carried out in the case of one a third party & simultaneously on the same date a survey was also carried out at the business premises of the assessee. During the course of search, unaccounted cash was found from the premises of the searched person. Out of the said cash, an amount of Rs.36 lakhs was belonging to the assessee. In the Section 132(4) statement the assessee admitted ownership of the cash. However, he failed to explain any bank withdrawals or accounting entries to substantiate the source of the money. The only explanation offered was that the amount represented sale receipts from tyre trading & not unaccounted income. Additionally, 60 grams of gold coins (valued at ₹1.97 lakhs) were found at the assessee’s premises.
AOr noted that that the assessee did not disclose the cash or gold in his original return filed after the search & held that the cash was not recorded in the books of account nor supported by any evidence. Hnece treated both cash & gold coins as undisclosed income.
Before the CIT(A) , assessee contended the cash was business income, not undisclosed income & gold coins should be treated as explained considering the family’s status & CBDT Instruction 1916 dt 11.05.1994), which provides guidelines for seizure of jewellery during search. CIT(A) rejected both claims, stating that there was no evidence that the cash originated from tyre sales & that CBDT Instruction No.1916 is applicable only to jewellery worn by family members, not to gold coins.
