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Judgment
PER VIKAS AWASTHY, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-3, Noida [in short ‘the CIT(A)’] dated 06.04.2026, for Assessment Year 2022-23.
The solitary issue assailed by the assessee in the present appeal is, addition of Rs.1,43,624/- on account unexplained cash confirmed by the CIT(A).
Shri Shiv Kumar Gupta, appearing on behalf of the assessee submits that a search action was carried out on the premises of Sharda Group of Family and Agarwal Family on 08.03.2022. Consequent to search unaccounted cash and jewellery were found and seized. In the case of assessee addition of Rs.11,84,750/- on account of unexplained money u/s.69A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was made. Further, an addition of Rs.8,03,469/- was made on account of unexplained jewellery. The aforesaid additions made by the Assessing Officer (AO) vide assessment order dated 26.03.2024 passed u/s.143(3) of the Act were challenged by the assessee in appeal before the CIT(A). The First Appellate Authority deleted the entire addition in respect of alleged unexplained jewellery. With regard to unexplained cash, the CIT(A) accepted that out of total cash Rs.23,69,500/- found and seized from residential premises of the Agarwal Family cash aggregating to Rs.18,82,251/- belongs to M/s. Idle Laminates P. Ltd. In so far as remaining amount of Rs.4,87,248/-, the CIT(A) on estimation deleted the addition of Rs.2,00,000/- and remaining Rs.2,87,248/- was confirmed. One half share of the said unexplained cash was added in the hands of the assessee. The ld. AR contended that the assessee had furnished the details and bifurcation of cash belonging to the family members as under:-Rajeev Agarwal Rs.2,20,468/-Rishabh Agarwal Rs.61,261/-Manisha Agarwal Rs.2,14,270/-Total Rs.4,87,248/-
The ld. AR submitted that Rajeev Agarwal and Manisha Agarwal had sworn affidavit to the effect that Rs.2,20,468/- and Rs.2,14,270/-, respectively belongs to them and is reflected in their personal books of account. They further admitted that the aforesaid amount is part of the total cash seized during search proceedings. Once, the amounts have been owned by family members and has been reflected in their respective books of accounts, any part of the said amount cannot be added in the hands of the assessee. Any addition made from cash already accounted would result in double taxation of the same amount. Thus, the AR of the assessee prayer for deleting the addition.
Per contra, Shri Nirmal Nangia, representing the department relying on findings of the CIT(A) prayed for dismissing appeal of the assessee.
Both sides heard, orders of the lower authorities examined. The limited issue for consideration in the present appeal is addition of Rs.1,43,624/- confirmed by the CIT(A) on account of unexplained money.
During the course of search inter alia alleged unexplained cash of Rs.23,69,500/-was found and seized. The AO treated half of the aforesaid cash as unexplained money in hands of the assessee. During assessment proceedings, the assessee furnished bifurcation of cash seized belonging to the family members, the assessee also furnished affidavits sworn by Shri Rajeev Agarwal and Mrs. Manisha Agarwal admitting cash of Rs.2,20,468/- and Rs.2,14,270/-belonging to them. A perusal of the affidavit available on record reveals that the cash owned by Shri Rajeev Agarwal and Mrs. Manisha Agarwal is part of the total cash seized during search operation and the same has been reflected in their respective personal books of account. The assessee has admitted only cash to the extent of Rs.61,261/- and that to has been purportedly recorded in his personal books of account. Once, the cash has been owned by Shri Rajeev Agarwal and Mrs. Manisha Agarwal there is no plausible reason to make addition of the said cash in the hands of the assessee. Therefore, the addition of Rs.1,43,624/- which is part of cash seized during the search is directed to be deleted.
In the result, appeal by the assessee is allowed.