2024 (8) TMI 1360 - AT - Income Tax

Unexplained cash - addition u/s 69A in respect of the cash found during the search - Assessee produced cash book to explain cash - DR submitted that the cash book produced by the assessee is an afterthought and maintaining of cash book is not mandatory for the individual, therefore, the assessee cannot rely on such document - as argued Assessee s name along with Subhash Chand Aggarwal and other family member s name written but the addition has been made only in the name of the assessee. HELD THAT - 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 . CIT(A) without any basis observed that the cash book was created to explain the unaccounted cash found and seized during the course of the search. CIT(A) treated that the amount as explained on the estimated basis and confirmed the rest of the addition - In our considered opinion, the findings given by the CIT(A) on the cash book is baseless and perverse. 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. - Assessee appeal allowed.

Summary

Issues:
1. Addition of Rs. 10,68,100/- confirmed by Ld. Commissioner of Income Tax (Appeals) challenged as arbitrary and unsustainable.
2. Allegation of erroneous addition by the Assessing Officer without considering evidence presented by the appellant.
3. Dispute regarding the authenticity and relevance of the cash book presented by the appellant during the assessment proceedings.

Analysis:

Issue 1:
The appeal was filed against the order of the Learned Commissioner of Income Tax (Appeals) confirming the partial addition of Rs. 10,68,100/-. The appellant contended that the addition was arbitrary, against the law, and not sustainable based on legal and factual grounds. The appellant sought to challenge the confirmation of the addition on various legal and factual bases. The grounds of appeal highlighted the appellant's dissatisfaction with the decision of the Ld. CIT(A) regarding the addition.

Issue 2:
During the search and seizure operation, cash amounting to Rs. 14,18,100/- was found at the residential address of the Assessee's family members. The appellant argued that the cash found belonged to the family members and was supported by a cash book presented to the Assessing Officer. The appellant contended that the addition made by the Assessing Officer was erroneous as it failed to consider the evidence provided by the appellant. The appellant emphasized that the addition was made without reconciling the cash found during the search with the details in the cash book, leading to an unjust assessment.

Issue 3:
The authenticity and relevance of the cash book produced by the appellant became a point of contention. The appellant maintained that the cash book accurately reflected the ownership of the cash found during the search and seizure operation. However, the Lower Authorities raised doubts about the necessity and credibility of maintaining a cash book for an individual. The Ld. CIT(A) disbelieved the cash book, stating that individuals generally do not maintain such records. Despite the appellant's explanation and evidence, the Ld. CIT(A) confirmed a partial addition based on estimated grounds. The Tribunal, after considering the facts and evidence, concluded that the authorities erred in sustaining the addition based on unsubstantiated reasons and allowed the appellant's appeal, thereby deleting the addition made by the Assessing Officer.

In conclusion, the Tribunal allowed the appeal filed by the assessee, highlighting the errors in the assessment made by the authorities and emphasizing the importance of considering all relevant evidence before confirming additions in tax assessments.