Sr. No.

Case Name

Conclusion

Recent Rulings

1.

[TS-283-ITAT-2017(DEL)]

'Complex web of structures' lands NDTV's $150mn overseas funding in Sec. 69A net

Delhi ITAT upholds AO & DRP's order for AY 2009-10 in case of NDTV India to tax Rs 642 crores ($150 millions) raised at the level of Dutch subsidiary, followed by series of re-structuring transactions; Confirming invocation of Sec 69A [dealing with  ‘unexplained money’ addition], ITAT holds that "transaction used principally as a devise  for the distribution/ diversion of sum to the Indian entity" &  that "the beneficial owner of the money is the assessee"; Referring to chargeability u/s. 69A, ITAT notes that Revenue had established that “assessee was the owner of the money which has been received by the subsidiary in offshore jurisdiction and which has travelled to the coffers of the assessee” by way of series of re-structuring transactions

2.

[TS-6472-ITAT-2015(HYDERABAD)-O] 

Inward remittance from self-owned Mauritius Co, not unexplained income, not accruing/arising in India

Holds funds received through banking channel with necessary statutory approvals into the assessee's NRI A/c, not unexplained income; Assessee received funds from self-owned Mauritius co (M/s.Vitrual International Ltd.) through normal banking channels; Expresses disbelief as to how inward remittance into NRI A/c of a non-resident Indian can be considered as unexplained when the assessee had furnished enough evidences including a certificate from Mauritius Co; Notes that assessee received funds into Mauritius account making it source of the source and thus beyond AO's power to examine unless any incriminating evidence is found.

3.

[TS-6707-ITAT-2012(MUMBAI)-O]

No addition u/s 69A in respect of unexplained deposits in wife’s account

Holds that assessee not liable to explain the source of deposits in others' bank accounts; Since the account is of his wife being an independent taxpayer, no addition u/s 69A can be done in respect of deposits in the bank accounts not owned by assessee.

 4.

[TS-5504-HC-2017(KARNATAKA)-O]

Cash deposits in bank account added u/s.69A as unexplained money in absence of source explanation

HC dismisses assessee’s appeal; Observes that ITAT had given relief to the extent of cash withdrawals and hence the remaining amount was liable to be added u/s 69A in absence of any explanation for the source of the balance money; Holds that “In the absence of any other document placed before us, a different conclusion on facts, in any event, cannot be reached by us” and hence upholds ITAT’s order sustaining additions of unexplained money u/s.69A

5.

[TS-5029-ITAT-2017(CHANDIGARH)-O]

Addition of amounts as unexplained expenditure restricted to only amounts ‘paid’ and not applicable to amounts ‘payable’

Addition of amounts as unexplained expenditure restricted to only amounts ‘paid’ and not applicable to amounts ‘payable’; Credit purchase cannot be treated as unexplained income u/s. 69A in absence of payment proved by the AO against the same; Holds that addition of amounts from seized paper during search should be restricted to only those amounts against which “amount jama” was written as it shows that assessee has ‘paid’ those amounts to the third party; Follows decision of Delhi HC in Girish Chaudhry [TS-5442-HC-2007(DELHI)-O]

6.

[TS-5035-ITAT-2017(RAIPUR)-O] 

Retracted statement of a chartered accountant cannot be a basis for addition of share capital and share premium in the hands of assessee u/s. 69A

Retracted statement of a chartered accountant cannot be a basis for addition of share capital and share premium in the hands of assessee u/s. 69A - Rules in favour of assessee; Holds that assessee who is neither a shareholder nor a director of a company cannot be deemed to be the owner of shares in absence of any other cogent evidence, merely based on a statement of the chartered accountant who had later on retracted the same; ITAT holds that primary onus lies on the company to prove the veracity of its share capital and share premium; If company is unable to justify, the onus shifts to the individual-shareholder

7.

[TS-5304-ITAT-2016(KOLKATA)-O]

ITAT upholds deletion of addition made on account of undisclosed credit balance of Demand Drafts

ITAT upholds CIT(A)’s deletion of addition made on account of undisclosed credit balance of Demand Drafts (DD) amounting to Rs.40,00,000/-made by AO; ITAT holds that as per the provisions of Sec 69A, unexplained money can be brought to tax if it is not recorded in the books of accounts and assessee offers no explanation about the nature and source of acquisition of money; Observes that DDs were made from the disclosed bank account of assessee and were transferred to his saving bank account and it was also nowhere mentioned that this account of the assessee wasn’t disclosed in the return of income 

8.

[TS-5037-HC-2016(PUNJAB & HARYANA)-O]

Sec. 69A - HC explains application of a deeming provision - suspicion and doubt cannot replace proof or translate into reasons

Dismisses Revenue’s appeal on grounds of absence of tangible material to invoke a deeming provision; Holds that “a large gift received from a foreign country is bound to raise suspicion but cannot disregard the fact that suspicion and doubt cannot replace proof or translate into reasons, much less reasons for invoking a deeming provision to hold that gifts represent the income of the assessee, particularly in the absence of relevant facts”; Explains that a deeming provision requires the AO to collect relevant facts and then confront the assessee, who is thereafter, required to explain incriminating facts and in case he fails to offer a credible information, the Assessing Officer may validly raise an inference of deemed income under section 69-A of the Act.

9.

[TS-5450-HC-2015(BOMBAY)-O]

Statements given on oath cannot supersede letter submitted to ADIT explaining  jewellery seized u/s 69A

Sec. 69A - Bombay HC holds that a letter to ADIT explaining the jewellery seized by the Department during a search u/s. 132 submitted much later after the date of search, which demonstrates a stand different from the one taken in the statements given on oath during the search, cannot supercede/replace the statements given on oath during the search, particularly when the said statements were not specifically retracted and there being no circumstances explained which would warrant/justify ignoring the earlier statements.

  10.

[TS-5360-HC-2017(ALLAHABAD)-O] 

Addition of undisclosed income upheld of money and jewelry found in various bank lockers in the names of assessee’s wife and his sons

Addition of undisclosed income upheld of money and jewelry found in various bank lockers in the names of assessee’s wife and his sons since the family members lacked the capacity to generate the kind of funds found during the search and the assessee on the other hand had the capacity to earn money commensurate to the money and jewellery found during the search; HC rules in favour of Revenue; dismisses orders of ITAT’s accountant member and third member; Holds that “Clearly they had claimed the money and jewellery only to cover the unexplained income of the assessee.

11.

[TS-5163-HC-2017(GUJARAT)-O] 

In absence of any evidence that money found in the bedroom belonged to assessee’s sister, upholds addition u/s 69A

SC dismisses assessee’s appeal and upholds addition u/s. 69A for amount seized from assessee’s bedroom pursuant to search / seizure operation; Rejects assessee’s stand that the amount seized was belonging to his sister and it was found from her bedroom who has come to stay since last 5 to 6 days with her husband; Holds that there is nothing on record to prove that the bedroom was in exclusive possession of assessee’s sister and her husband since they had come to stay there voluntarily

  12.

[TS-5049-ITAT-2017(MUMBAI)-O]

Cash deposits not to be treated as unexplained money in the hands of a small businessman

Unexplained money u/s 69A : Cash deposits not to be treated as unexplained money in the hands of a small businessman if sufficient explanation provided and purchases made through account payee cheques issued from the same bank account - ITAT rules in favour of assessee, deletes the addition u/s.69A confirmed by CIT(A)

13.

[TS-5363-HC-2017(PUNJAB & HARYANA)-O]

In absence of linkage between cash withdrawn from the bank and cash deposit, cash deposits to be treated as unexplained income u/s. 68 / 69A

HC upholds ITAT order; ITAT had held the deposits to be unexplained on the observation that the withdrawals were made for the purpose of business and were not available for redeposit; It was further observed that in the absence of any detail of expenses incurred by the assessee in this period the cash flow statement has no relevance and the entire withdrawal cannot be said to have been redeposited; The ITAT had noted that “out of the 33 withdrawals, only two withdrawals...were made in cash. The rest were all withdrawals by cheque ....

14.

[TS-5370-HC-2015(BOMBAY)-O]

Year of opening the locker and not the year when locker key found relevant for addition u/s 69A

HC dismisses assessee’s appeal; Holds that the year relevant to the date (28th July, 1986) of opening the locker (which belonged to another person) when jewellery belonging to assessee was found, is the year in which addition u/s. 69A towards unexplained jewellery is to be made; Rejects assessee’s contention that the year of addition has to be the year relevant to the date (20th March 1986) in which the locker key was found in assessee’s premises; Distinguishes the rulings relied on by the assessee on the ground that in those cases, the offending goods/money etc was found in the possession of the party in whose hand Sec. 69A was applied.

 15.

[TS-5973-HC-2015(GUJARAT)-O]

Addition u/s 69A - Unexplained Bank deposits - Failed to establish and prove in trading business

Where assessee has failed to establish that the receipts in his undisclosed bank account relate to income from undisclosed business of trading in art silk cloth, then the entire receipts are liable to be taxed u/s 69A - HC rules in favour of Revenue; Holds that “When it has been found that the assessee has miserably failed to establish and prove that he was in the business of trading in art silk cloth and that the aforesaid deposit of Rs.45,85,861/- made in cash in his bank account was with respect to his undisclosed business of trading in art silk cloth, there is no question of further making addition on the basis of estimation at 8% of the total turnover.”

  16.

[TS-5267-HC-2015(GUJARAT)-O]

HC upholds ITAT decision which partly deleted the addition of cash deposits made by the AO

HC upholds addition of peak credit in assessee’s bank account and a 5% margin on cash deposits treating it as business income –and held that in absence of any material by the Revenue as to why the withdrawals made from the bank account cannot be treated as available for making the cash deposits in the same bank account, addition of only peak deposit is to be sustained; ITAT further held that the frequency of deposit and withdrawal indicates that the assessee was carrying on certain undisclosed deposits and treated the said deposits as business income and made an addition of 5% of the deposits as business profit of the assessee

17.

[TS-5487-ITAT-2017(COCHIN)-O]

Addition u/s 69A - Agricultural income - source of income - Cash deposit and withdrawals from Bank

Addition u/s 69A deleted since assessee proved that the deposits in the bank account was his agricultural income - ITAT rules in favour of assessee; Holds that the payments shown in the confirmation letter given by purchasers of rubber latex and scrap from the assessee match with the deposits made by the assessee in the bank account.

Landmark Rulings

18.

[TS-5002-SC-1988-O]

[TS-5947-HC-2008(BOMBAY)-O]

The term ‘income’ as used in section 69A has a wide meaning and means anything which came in or resulted in gain. The Revenue had rightly considered the value of gold as income of the assessee from undisclosed sources and he was not entitled to deduction on the ground of business loss

19.

[TS-5011-SC-1980-O]

Sender and receiver of the amounts being persons different from the assessee-firm, the burden was on the department to show that the money belonged to the assessee

One of the employees of the assessee-firm remitted by telegraphic transfers a total sum of Rs. 1,07,350 from Madras to Bombay. The assessee-firm had its offices at both the cities. The remittances were addressed to another employee of the assessee-firm at its Bombay office. After making certain enquiries from the bank concerned, and without disclosing the matter of enquiry to the assessee, the Income-tax Officer made addition in the hands of the assesseefirm. It was held that since the sender and the receiver of the amounts were persons different from the assessee-firm, the burden was on the department to show that the money belonged to the assessee by bringing proper evidence on record. This burden not having been discharged, the addition was not justified. Also, there was failure of natural justice. 

[TS-5026-SC-2007-O]

The onus of proving the source of deposit primarily rests on the persons in whose names the deposits appeared in the various banks

There was no evidence to show that members of the public had been placing their deposits with the firm through their relatives and friends and there was no question of linking up all those amounts with the books of the firm. As the assessee, was not able to explain the source of the moneys deposited, the Department was right in making the individual assessment in the name of the assessee.

[TS-5014-HC-1982(MADRAS)-O]

It is open to the Tribunal, to determine how much of the value of unexplained investments can be really regarded as representing the undisclosed income of the assessee

Nothing contained in Sec. 69A compels either the Assessing Officer or any of the appellate authorities to choose between the two alternatives, namely, either to assess the value of unexplained investments in whole or not to assess any portion of the value of the investment. The position, indeed, is quite otherwise. Depending on the facts and circumstances of each case, it is open to the Tribunal, as much to the Assessing Officer, to determine how much of the value of unexplained investments can be really regarded as representing the undisclosed income of the assessee

22.

[TS-5181-HC-1982(Calcutta)-O]

The deeming part of section 69A, dealing with unexplained money, etc., comes into play only if the following two conditions are fulfilled: (1) the assessee is found to be owner of any money, bullion, jewellery or other valuable article; and (2) such money, bullion, jewellery or valuable article is not recorded in the books of account, if any maintained by the assessee for any source of income

Assessee, a dealer in precious stones, was found to be in possession of precious stones, etc., in the course of search conducted by the Customs authorities. The assessee could not prove the source of such articles. It was, on facts, held that the Tribunal was justified in concluding, in the absence of any reasonable explanation, that the assessee was the owner of articles and the value of such articles were assessable as income of the assessee under section 69A

23.

[TS-5761-HC-1980(Gauhati)-O]

The crucial date for the purpose of section 69A is the date on which the assessee became to own the asset concerned and not the date on which the finding about his ownership is recorded by the Assessing Officer; HC remarks that “Such a finding, whenever recorded, would refer back to the date of acquisition by the assessee of the asset concerned”

24.

[TS-5757-HC-1980(Allahabad)-O]

Section 69A available only in the course of regular assessment proceedings, cannot be taken help of for issuing authorisation warrant for a search; Clarifies that “the two stages—authorising search u/s 132 and regular assessment following the search—are quite different.”

25.

[TS-5735-HC-1988(Calcutta)-O]

There is a prima facie presumption that one who is found in possession of an article or thing is the owner thereof unless that presumption is rebutted by cogent evidence

A search was carried out at a premises, which was also used by the assessee-firm for its business purposes. Certain partners of the firm also resided there. Certain jewellery was found in the possession of the wife and mother of one of the partners of the firm. It was held, on facts, that the value of the jewellery was not assessable in the hands of the assessee-firm