The Delhi bench of the Income Tax Appellate Tribunal (ITAT) held that the addition under Section 69A of the Income Tax Act, 1961 cannot be imposed when the assessee doesn’t hold the ownership of the money and there is no evidence found concerning the cash.
A search was conducted under Section 132(1) of the Income Tax Act at the residential premises of the assessee who is a practicing Chartered Accountant. He had filed his return declaring income of Rs. 12,16,68,990/- which was processed under Section 143(1) of the Income Tax Act. Notice under Section 153A of the Income Tax Act was issued in response to which the assessee filed a return declaring the income of Rs. 12,16,68,990/-.
The Assessing Officer (AO) held that Rs. 1.45 crores are actual cash arranged/paid by the assessee to HKA which was available with the assessee. He therefore made an addition of Rs. 1,45,00,000/- under Section 69A of the Income Tax Act to the income of the assessee in an assessment order passed under Section 153A/143(3) of the Income Tax Act.
The Two-member bench comprising of BRR Kumar (Accountant member) and Astha Chandra (Judicial member) held that it was not a case in which the assessee was found to be in possession of the cash of Rs. 1.45 crore in the search operation. Therefore, it cannot be presumed that the assessee was the owner of the said cash. To attract the provisions of Section 69A of the Income Tax Act sine qua non was “ownership” of money etc. which has not been recorded in the books of account.
The AO has made only the presumption that the said cash was ‘available with the assessee’ without bringing on record any material in support thereof. Thus, the appeal of the revenue was dismissed.
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