2016 (3) TMI 1241 - AT - Income Tax

Unaccounted cash receipts additions - Held that - We reiterate that Shri Bhikubhai has not been able to prove himself as the authorized person to operate the locker in question on the date of search. His corresponding plea before the Settlement Commission has also not been considered (supra). We observe in these peculiar facts and circumstances that not only assessment of an income is of paramount importance in scrutiny proceedings, but also it is equally significant that the same has to be done in the hands of the right assessee. We hold that it is the assessee only who is the rightful owner of the cash seized from its bank locker hereinabove in absence of any exception being pointed out. We conclude that the unaccounted cash seized sum of ₹ 74 lacs belonged to the assessee only and the same deserves to be assessed in its hands as against that in Shri Bhikubhai s case. We accept Revenue s arguments seeking to revive Assessing Officer s action. It is made clear that the assessing authority shall ensure that the same amount is not taxed twice. Treating the cash seized as advance tax - not granting any relief towards wrongly charging of interest u/s. 234A, 234B and 234C - Held that - Revenue only submits that the assessee raised this issue only in its return and not before that. We find that both the lower authorities have rejected its plea seeking interest relief inter alia for want of any specific prayer being made at its behest. We reiterate that the Revenue does not point out any exception to decision in accepting identical relief in Kanishka Print Pvt. Ltd vs. ACIT 2013 (7) TMI 14 - ITAT AHMEDABAD of interest therein so far credit of advance tax is concerned. The assessee has also not filed any evidence to prove that it had made any specific prayer before filing its return along with statement of income including ₹ 80 lacs seized in search as advance tax. We draw support from above stated judicial precedent and hold the assessee is entitled for claiming the impugned credit relief w.e.f. date of filing return only.

Summary

Issues Involved:
1. Deletion of unaccounted cash receipt addition of Rs. 74 lacs.
2. Deletion of unaccounted cash receipt addition of Rs. 80 lacs.
3. Treatment of cash seized of Rs. 80 lacs as advance tax and relief towards wrong charging of interest under sections 234A, 234B, and 234C of the Income Tax Act, 1961.

Issue-wise Detailed Analysis:

1. Deletion of unaccounted cash receipt addition of Rs. 74 lacs:
The Revenue challenged the CIT(A)'s order deleting the unaccounted cash receipt addition of Rs. 74 lacs made by the Assessing Officer (AO) in the assessment order dated 30-12-2011. The AO had added this amount to the assessee's income, rejecting the contention that the cash belonged to the chairman, who had included it in his cash flow statement. The CIT(A) deleted the addition based on the chairman's ownership claim and inclusion in his cash flow statement filed before the Settlement Commission. However, the Tribunal found that the chairman was not authorized to operate the locker from which the cash was seized and that the Settlement Commission had not considered the chairman's claim. The Tribunal concluded that the cash belonged to the assessee and should be assessed in its hands, reviving the AO's addition of Rs. 74 lacs.

2. Deletion of unaccounted cash receipt addition of Rs. 80 lacs:
The Revenue's appeal against the deletion of the Rs. 80 lacs addition was based on similar grounds as the Rs. 74 lacs case. The assessee had disclosed an income of Rs. 1.6 crores, including the Rs. 80 lacs, and treated it as advance tax. The Tribunal noted contradictions in the assessment of the unaccounted cash and directed the AO to re-decide the issue, ensuring that the same amount is not taxed twice. The appeal was allowed for statistical purposes, requiring a fresh examination by the AO.

3. Treatment of cash seized of Rs. 80 lacs as advance tax and relief towards wrong charging of interest:
The assessee contested the lower authorities' decision to treat the Rs. 80 lacs cash seized as advance tax and the consequent charging of interest under sections 234A, 234B, and 234C. The Tribunal referred to a co-ordinate bench decision in Kanishka Print Pvt. Ltd vs. ACIT, which held that seized cash could be treated as advance tax. The Tribunal directed the AO to give credit for the Rs. 80 lacs as advance tax from the date of filing the return, partially allowing the assessee's appeal.

Conclusion:
- The Tribunal allowed the Revenue's appeal regarding the Rs. 74 lacs addition, concluding it should be assessed in the assessee's hands.
- The Tribunal allowed the Revenue's appeal for statistical purposes regarding the Rs. 80 lacs addition, directing a fresh examination by the AO.
- The Tribunal partially allowed the assessee's appeal, directing the AO to treat the Rs. 80 lacs as advance tax from the date of filing the return and adjust interest calculations accordingly.

Order Pronounced:
The order was pronounced in the open court on 08-03-2016.