9911796707
|
Home
Issues Involved:
1. Deletion of the addition of Rs. 1,80,000 by CIT(A). 2. Powers of the police to seize cash. Issue 1: Deletion of the Addition of Rs. 1,80,000 by CIT(A) The Revenue challenged the deletion of the addition of Rs. 1,80,000, which was seized from the possession of an employee of the assessee. The cash was initially seized by the police and later requisitioned under s. 132A of the IT Act by the IT authorities. The assessee claimed the cash was the sale proceeds of grapes sold on behalf of farmers in Nasik, which the AO did not believe, treating it as undisclosed income. The assessee provided details of the farmers and the amounts due to them, and the IT authorities recorded statements from the assessee, his employee, and some of the farmers. Despite confirmatory letters and affidavits, the AO disbelieved the explanation, citing reasons such as the absence of books of account and lack of proof of delivery of grapes from Nasik to Gorakhpur. The AO added Rs. 1,80,000 as unexplained money. The CIT(A) deleted the addition, noting that the assessee's explanation was corroborated by independent evidence, including statements made immediately after the seizure and during IT proceedings. The CIT(A) found no reason to disbelieve the assessee's version, emphasizing that the arguments of the AO could not substitute factual evidence. The Revenue appealed, arguing the lack of details and proof of grape delivery, and suggesting that the statements were afterthoughts. The assessee countered by providing detailed records and confirmatory letters, asserting that the cash was indeed the sale proceeds of grapes to be delivered to Nasik. The tribunal upheld the CIT(A)'s findings, noting that the assessee's commission income was accepted, and the turnover indicated that the seized amount was part of the sale proceeds. The tribunal emphasized that the onus to prove the source of cash was discharged by the assessee, supported by corroborative statements from the farmers and the employee. Issue 2: Powers of the Police to Seize Cash The tribunal also addressed the issue of the police's authority to seize the cash. The assessee had challenged the jurisdiction of the police, arguing that they had no right to seize cash from a businessman. The tribunal examined s. 102 of the Cr.P.C., which allows police to seize property suspected to be stolen or linked to a crime. However, it found that the police had no valid reason to suspect the cash was stolen or linked to a crime, as carrying cash for business is not inherently suspicious. The tribunal concluded that the police had unlawfully exercised their discretion in seizing the cash, as their actions were not justified under s. 102 of the Cr.P.C. This unlawful seizure initiated the IT proceedings, which the tribunal found to be vitiated by the improper actions of the police. Conclusion The tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s deletion of the addition and criticizing the police's unlawful seizure of the cash. The tribunal emphasized the importance of corroborative evidence and proper exercise of discretion by authorities in such cases.
|
