2020 (11) TMI 487 - HC - Income Tax

Cash seized during the search - HELD THAT - Assessee did not produce any material despite opportunity being afforded to show that the amount seized during the search belonged to M/s S.S.Tours and Travels. Even otherwise, the aforesaid finding is a pure finding of fact, which does not suffer from any perversity. It is well settled that this court in exercise of powers under Section 260A of the Act cannot interfere with the finding of fact until and unless the same is demonstrated to be perverse - Decided against assessee.

Summary

Issues:
- Whether the findings of the tribunal are considered perverse in ignoring the reconciliation of cash found during search with the balance sheet?
- Whether the tribunal was correct in disregarding the audited balance sheet reconciling the seized cash?
- Was it appropriate for the tribunal to uphold the addition despite the appellant explaining the cash found and seized?

Analysis:

Issue 1: Findings of the Tribunal
The appeal under Section 260A of the Income Tax Act, 1961 involved the assessment year 2004-05. A search conducted on the assessee revealed incriminating material related to payments. The Assessing Officer added a sum found during the search to the assessment. The Commissioner of Income Tax (Appeals) partly allowed the appeal but sustained the addition. The tribunal later found that the books were not updated during the search but were reconciled during assessment with proper documentation and audited statements. No discrepancies were identified.

Issue 2: Deletion of Cash Seized
The matter was remitted to the tribunal by the High Court as the tribunal had not provided a finding on the cash found during the search. Upon re-examination, the tribunal queried if the income was taxed twice, highlighting the potential for double taxation. The tribunal noted that the assessee failed to prove that the seized cash belonged to another entity. The tribunal's finding was considered a fact, not suffering from any perversity.

Issue 3: Lack of Evidence and Perversity
The assessee failed to produce material showing the seized cash belonged to another entity, despite opportunities. The tribunal's factual finding was upheld, emphasizing the court's limited interference in findings of fact unless proven perverse. Citing legal precedents, the court concluded against the assessee, dismissing the appeal in favor of the revenue.

In conclusion, the High Court dismissed the appeal, ruling against the assessee based on the lack of evidence and the non-perversity of the tribunal's factual findings regarding the seized cash and potential double taxation issues. The legal principles of limited interference in factual findings were reiterated, leading to the judgment in favor of the revenue.