Income Tax Appellate Tribunal - Ahmedabad
M/S. Arvindbhai Hirenbhai, Ahmedabad vs The Dy.Cit.,C.C.1(2),, Ahmedabad on 4 June, 2018
ITA No.316/Ahd/2016
A.Y. 2014-15
Page 1 of 3
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "C" BENCH, AHMEDABAD
BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER
AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER
ITA No.316/Ahd/2016
Assessment Year: 2014-15
M/s. Arvindbhai Hirenbhai, vs. Dy. Commissioner of Income Tax,
Zaveri Chambers, Central Circle - 1(2), Ahmedabad.
Ratanpole,
Zaveriwad,
Ahmedabad - 380 001.
[PAN - AAVFA 3667 Q]
(Appellant) (Respondent)
Appellant by : Shri P.F. Jain, A.R.
Respondent by : Shri O.P. Vaishnav, CIT(D.R.)
Date of hearing : 25.04.2018
Date of pronouncement : 04.06.2018
ORDER
PER RAJPAL YADAV, JUDICIAL MEMBER:
1. Assessee is in appeal before the Tribunal against the order of ld. CIT(A) dated 20th September, 2016 passed for A.Y. 2014-15.
2. The solitary grievance of the assessee is that the ld. CIT(A) has erred in upholding addition of Rs.38,50,000/-.
3. Brief facts of the case are that a search under section 132 of the Income Tax Act, 1961 ('the Act' hereinafter) was carried out by DDIT (Investigation) Unit, Mumbai in the case of 4 trucks at Mumbai Central Railway Station. During the search conducted on 01.07.2013, a statement of Shri Mohanlal Somji Prajapati was recorded under section 132(4) of the Act. Shri Prajapati was carrying a bag containing cash of Rs.35,00,000/- and he was an employee of the assessee. He admitted that the said cash was handed over to him by Shri Bipin Chandra S. Pandey, partner of the assessee firm. Hence the assessee accepted that cash belonged to his firm and offered for taxation. On 3rd March 2014 a bag of cash containing Rs.38,50,000/- was stolen. The assessee reported the matter to the Police and this cash was recovered by Police. The assessee applied for release of the cash before the Judicial ITA No.316/Ahd/2016 A.Y. 2014-15 Page 2 of 3 Magistrate. However, its application was rejected on 14.03.2014. The assessee thereafter filed a revision before the Additional Session Judge bearing no.30/2014. Learned Additional Session Judge on 14th April 2014 directed the Registry to release the cash to the assessee on a surety bond of Rs.60,00,000/-. In this way, cash was given back to the assessee. Ld. Assessing Officer sought explanation of the assessee about source of fund. In response to the query of Assessing Officer, it was contended that this amount was received from various parties and it was to be delivered to other parties. A list containing name of persons to whom it was to be delivered was found in the bag itself. The assessee submitted a list of names and phone numbers of the persons from whom cash was received and it was to be delivered. Ld. Assessing Officer was not satisfied with the explanation of the assessee. He observed that the assessee is engaged in the business of Angadia It was unnecessarily keeping huge cash balance in the cash book with ulterior motive. Hence, he did not accept the explanation of the assessee and made addition of Rs.38,50,000/- with the aid of section 68 as unexplained cash credit.
4. Dissatisfied with the addition, the assessee carried the matter before the ld CIT(A). Ld. CIT(A) confirmed the addition by observing as under :-
"The facts of the case, submissions of the appellant and findings of the AO have been perused. The contention of the appellant that the cash found in the possession of the police belonged to various parties and the particulars of the persons to whom the cash was to be delivered were furnished to the DDIT (Inv), Ahmedabad was contrary to the very fact that Shri Vipin Chand S. Pandey in his statement recorded u/s 132(4) and also in the statement recorded u/s 131 of the Act confirmed that the cash was unaccounted income from the commission business of the firm for the A.Y. 2013-14 was not rebutted by the appellant in the assessment proceedings nor in the appeal proceedings. In view of the given facts and circumstances of the case, in my considered opinion the action of the AO does not warrant any interference. Accordingly, the ground of appeal is dismissed."
5. With the assistance of ld. Representatives we have gone through the records carefully. A perusal of the records would indicate that the learned first appellate authority has mixed the facts with two incidents. The addition of Rs.38,50,000/- made by the Assessing Officer is the amount which was recovered by the Police. It was not seized in the search conducted by the Income Tax Department under section 132 of the Act. It is also pertinent to observe that the assessee submitted the names and phone numbers of the senders as well as receivers. Ld. Assessing Officer did not ITA No.316/Ahd/2016 A.Y. 2014-15 Page 3 of 3 carry out any exercise to find out the genuineness of the claim of the assessee. It is also pertinent to observe that the Assessment Order has been passed under section 143(3) read with section 153B of the Act. But no evidence was found showing that sum of Rs.38,50,000/- was an unexplained amount of the assessee. This evidence was not unearthed in the search conducted by the Department under section 132 of the Act. Whatever evidence found during the search of the Department, the assessee has already admitted that income and was offered for taxation. Qua the second item, no search was conducted and second incident taken place on 03.03.2014 whereas the first one took place in 1st July, 2013. Thus, learned Revenue Authorities have failed to bring any material on record showing that cash seized by the Police was unexplained. It has failed to rebut the evidence submitted by the assessee. Moreover, it cannot be added in the assessment framed under section 153B of the Act. We allow the appeal of the assessee and delete the addition.
6. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on this 4th day of June, 2018.
Sd/- Sd/-
AMARJIT SINGH RAJPAL YADAV
(Accountant Member) (Judicial Member)
Ahmedabad, the 4 th day of June, 2018
PBN/*
Copies to: (1) The appellant (2) The respondent
(3) CIT (4) CIT(A)
(5) Departmental Representative (6) Guard File
By order
UE COPY
Assistant Registrar
Income Tax Appellate Tribunal
Ahmedabad benches, Ahmedabad