Del. HC: Denying Seat to Candidate Due to Administrative Fault Would be Unjust  ||  All. HC: Not Mandatory for Passport Authority to Impound Passport of Accused Persons  ||  Raj. HC: In Absence of Statutory Rules, Denying Appt. on Basis of Minimum Height is Discriminatory  ||  MP HC: Party Required to Lay Factual Foundation for Getting Benefit of Section 65 of Evidence Act  ||  Ker. HC: Settlement of Cases Including Offence of Rape & POCSO Act Offences is Not Permissible  ||  Gujarat High Court: Wife Allowed to Become Guardian & Manager of Husband in Coma  ||  SC: Partition of Property Can’t be Done by Metes & Bounds in Chandigarh  ||  SC Approves Requirement for Judicial Officers to be Converse With Local Language  ||  Kerala High Court: Denial of Ordinary Leave Reduces Convict’s Chances of Rehabilitation  ||  Delhi HC Issues Circular Regarding Pass-Overs or Adjournments in Bail, Parole Matters    

DCIT vs. Bindal Papers Mills Ltd. - (Income Tax Appellate Tribunal) (02 Dec 2022)

Mere reflecting the unexplained cash in the books of accounts in absence of any supportive documents, cannot be ground for deletion of the addition

MANU/ID/1872/2022

Direct Taxation

In present case, the assessee was engaged in manufacturing and trading of paper and paper board. The assessee filed return of income declaring 'NIL' income under Section 139(1) of the Income Tax Act, 1961 (IT Act). Subsequently, the assessee revised the return of income again declared 'NIL' income. The case of the assessee was selected under CASS for complete scrutiny. The assessment order came to be passed by making an addition of Rs. 1 crore seized from one Mr. Pankaj Goel which is found to be unaccounted cash of the assessee company. Accordingly, the said cash has been treated as unexplained money and added to the Assessee's total income under Section 69A of the IT Act. Further, the Learned A.O. made disallowance of Rs. 6,23,081 under Section 14A of the IT Act and computed the total income of the assessee at Rs. 1,06,23,081.

Aggrieved by the assessment order, the assessee has preferred an appeal. The Learned CIT(A) vide order deleted the addition of Rs. 1 crore made on account of unexplained money under Section 69 of the Act. Aggrieved by the said deletion of Rs. 1 crore by the CIT(A), which was made under Section 69A of the IT Act by the A.O., the Revenue has preferred the present appeal.

Admittedly, the assessee company is the owner of the seized cash, but the assessee has failed to explain with regard to source of the said cash. Therefore the Learned A.O. has rightly made the addition which should not have been interfered by the Learned CIT(A). The assessee has only relied on the cash book which cannot be believed in the absence of corroborative evidence such as bank statement, audited balance sheet, profit and loss account along with tax audit report for the year under consideration. The Learned CIT(A) without appreciating the above facts, based on the statements of the parties and mere relying on the cash book which was not corroborated with other documents, deleted the addition made by the A.O. which cannot be sustained.

When the cash is found with an assessee, it is the duty of the assessee to prove the source of such cash by providing sufficient evidence to come to a conclusion to satisfy the source of such cash. In the absence of such proof, the Revenue Authorities are bound to make additions. Mere reflecting the unexplained cash in the books of accounts in absence of any supportive documents cannot be ground for deletion of the addition. The Learned CIT(A) has committed an error in deleting the addition. Therefore, the order of the Learned CIT(A) is deleting the addition is set aside and the addition made by Learned A.O. is hereby sustained. Appeal filed by the Revenue is allowed.

Tags : ASSESSMENT   DELETION   LEGALITY  

Share :        

Disclaimer | Copyright 2024 - All Rights Reserved