No Addition U/S 69 Is Permitted Without Examining & Finding Fault In Cash Book Produced By Taxpayer: Delhi ITAT
Pankaj Bajpai
2 April 2024 9:30 AM GMT
On finding that the CIT(A) has failed to examine the cash book presented by the assessee, the New Delhi ITAT deleted the addition sustained by CIT(A) u/s 69 of the Income Tax Act. The Bench of the ITAT comprising of Yogesh Kumar U.S. (Judicial Member) and N. K. Billaiya (Accountant Member) observed that “The assessee having been produced the cash book and explained the cash found...
On finding that the CIT(A) has failed to examine the cash book presented by the assessee, the New Delhi ITAT deleted the addition sustained by CIT(A) u/s 69 of the Income Tax Act.
The Bench of the ITAT comprising of Yogesh Kumar U.S. (Judicial Member) and N. K. Billaiya (Accountant Member) observed that “The assessee having been produced the cash book and explained the cash found during the search and seizure operation contending that the cash found during the search are belongs to family members and considering the fact that even the Panchnama drawn during the search proceedings containing the names of the Assessee and other family members and the A.O. who has examined the cash book has not found fault on the same on the merit of it, in our considered opinion, the authorities have committed error in making/sustaining the addition.” (Para 6)
As per the brief facts of the case, a search and seizure action u/s 132 was carried out. A search warrant of authorization u/s 132 was issued and the search in the case was initiated. The assessee furnished the original return of income filed u/s 139(1). The case was picked up for 'compulsory scrutiny'. The assessment order came to be passed u/s 143(3) r.w.s 153A by computing the income of the assessee at Rs.3,32,61,550/- as against the returned income of the assessee at Rs.3,18,43,450/- by making an addition of Rs.14,18,100/- u/s 69A in respect of the cash found during the search.
The Bench noted that there is no doubt that during the assessment proceedings, the assessee produced a cash book and contended that the cash found during search and seizure action belonged to his 24 family members
The Bench observed that the AO has not doubted that the names reflected in the cash book are not the family members of the assessee or who are not residing under the same roof.
The Bench further observed that the CIT(A) has disbelieved the cash book only on the ground that 'generally individuals do not maintain cash book and it is not mandatory to maintain cash book for the individual'.
The Bench found that the CIT(A) without any basis observed that the cash book was created to explain the unaccounted cash found and seized during the search, but treated the amount of Rs.3,50,000/- as explained on the estimated basis and confirmed the rest of the addition of Rs.10,68,100/-.
Therefore, on finding the observation of CIT(A) was baseless and perverse, the ITAT allowed the assessee's appeal.
Counsel for Appellant/Taxpayer: Salil Aggarwal
Counsel for Respondent/Department: Subhra Jyoti Chakraborty
Case Title: Shri Mool Chand Aggarwal verses Asst. CIT
Case Number: ITA No.1786/Del/2022
