Sunil Kumar Jain Vs ACIT (ITAT Hyderabad)
₹33 Lakh Cash Seized Accepted as Business Income – Section 115BBE Addition Deleted-Cash Seized Already Declared in ROI – Tribunal Rejects 60% Tax Levy-ITAT Hyderabad
Background
- Assessee, engaged in electronic spare parts business, filed ROI declaring ₹54.37 lakh, which included cash seized.
- On 26.08.2020, during search proceedings, Department intercepted assessee carrying ₹33 lakh cash on a scooter.
- In sworn statement u/s 131(1A), assessee admitted cash belonged to him, sourced from business & rental income.
- AO rejected explanation, held turnover insufficient to justify such cash, and assessed ₹33 lakh as unexplained money u/s 69A, taxed u/s 115BBE (60% rate) as “Income from Other Sources”.
Before CIT(A)
- Assessee argued seized cash was already admitted as business income in ROI, supported by GST returns.
- CIT(A) held that to earn ₹33 lakh profit, turnover should be ~₹4.12 Cr., while assessee reported only ₹46.46 lakh.
- CIT(A) thus sustained AO’s addition.
Tribunal’s Observations /Decision
- Facts undisputed: cash was seized, admitted by assessee as business/rental income, and included in ROI.
- AO had no contrary evidence to prove cash was from undisclosed sources.
- Even though turnover was small compared to seized cash, assessee’s past ITRs showed only business & house property income, not other unexplained sources.
- Statement u/s 131(1A) + declared income supported assessee’s explanation.
- Thus, explanation was bonafide & acceptable.
- ITAT held seized cash should be assessed as business income at normal rates, not under sec.115BBE.
- Set aside CIT(A) order & directed AO to delete addition under 115BBE.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
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