ITAT upholds Addition of Unexplained Money, but directs AO to give benefit of Telescoping to Assessee [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) upheld addition of unexplained money, but directed the AO to give benefit of telescoping to assessee.

The assessee,  is an individual and derived income from salary, house property, income from business and income from other sources. He filed his return of income declaring total income. A search under section 132 of the Income Tax Act was conducted on 28.02.2017 at the residential premises of the assessee from where certain papers/documents belonging to the assessee were found and seized.

The jurisdiction of the assessee was transferred under section 127(1). In response to notice under section 153A, the assessee filed a return of income declaring total income of Rs.61,93,010/-. The A.O. issued notice under section 143(2) and subsequently notice under section 142(1) along with questionnaire. In response to the same, the assessee appeared before the A.O. and filed the requisite details from time to time. The A.O. thereafter completed the assessment under section 153A of the Income Tax Act determining the total income of the assessee at Rs.1,64,54,330/-.

The assessee has challenged the addition of Rs.1 lakhs made by the AO as unexplained money.

The AO during the course of assessment proceedings noted that during the course of search the premises were seized. It contains an entry dated 14.04.2015 of Rs.1,00,000/- against narration of Yadav bhai le gaye, 65000 unke, 35000/- mere. In absence of any satisfactory explanation given by the assessee, the AO made addition of Rs.1 lakhs u/s 69A of the Act.

In appeal, the ld. CIT(A) sustained the addition by holding that it is a clear entry of handing over cash of Rs.1 lakh to Yadav Bhai and no specific explanation was given by the assessee either before the AO or before him. Since, the Counsel for the assessee could not explain regarding the nature and source of the entry of Rs.1 lakh.

The coram of Judicial Member, Suchitra Kamble and Accountant Member, R.K.Panda has upheld the addition made by the AO and sustained byCIT(A). However, the alternate contention of the Counsel for the assessment that the benefit of telescoping be given is accepted. The AO is directed to give the benefit of telescoping as held by us in the preceding years. The ground raised by the assessee is accordingly partly allowed for statistical purposes.

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