2022 (12) TMI 182 - AT - Income Tax

Addition on account of unexplained money u/s 69A - unaccounted cash - assessee vehemently argued that the assessee has withdrawn the cash from the bank and accumulated the same to the total tune of Rs. 1 crore which has been carried by the employee of the assessee - HELD THAT - Assessee has not made available of any documentary proof before Lower Authorities such as bank statement withdrawing such huge sum. Further at no point of time such transactions of cash through imprest account has taken place in the past in the cash book which can prove cash purchase of raw material, wheat straw. The assessee has only relied on the cash book which cannot be believed in the absence of corroborative evidence such as bank statement, audited balance sheet, profit and loss account along with tax audit report for the year under consideration. When the cash is found with an assessee, it is the duty of the assessee to prove the source of such cash by providing sufficient evidence to come to a conclusion to satisfy the source of such cash. In the absence of such proof, the Revenue Authorities are bound to make additions. Mere reflecting the unexplained cash in the books of accounts in absence of any supportive documents, cannot be ground for deletion of the addition. In our considered opinion, CIT(A) has committed an error in deleting the addition. Therefore, the order of the CIT(A) is deleting the addition is herby set aside and the addition made by Ld. A.O. is hereby sustained. - Decided in favour of revenue.

Summary

Issues:
1. Addition of unexplained money under section 69A.
2. Delay in filing the appeal by the Revenue.

Issue 1: Addition of unexplained money under section 69A
The appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) regarding the addition of Rs. 1,00,00,000 on account of unexplained money under section 69A for the assessment year 2017-18. The Revenue contended that the cash seized did not belong to the Assessee's imprest fund and that the transaction through the imprest account had never occurred in the past. The Revenue argued that the recording of the transaction in the cash book was an attempt to make the cash appear legitimate. The Revenue also highlighted that the addition was made under section 69A and not under section 40A(2) of the Act. The delay in filing the appeal was condoned by the Tribunal due to a bonafide mistake in calculation of tax effect. The Tribunal examined the facts, including the source of the seized cash, statements of involved parties, and the lack of sufficient evidence provided by the Assessee to prove the source of the cash. The Tribunal noted discrepancies in the cash book and the absence of corroborative evidence such as bank statements and audited reports. The Tribunal held that the addition made by the Assessing Officer was justified, and the deletion of the addition by the Commissioner of Income Tax (Appeals) was erroneous. Therefore, the Tribunal allowed the Revenue's appeal and sustained the addition of unexplained money under section 69A.

Issue 2: Delay in filing the appeal by the Revenue
The Revenue faced a delay of 154 days in filing the appeal, attributing it to an inadvertent mistake in the calculation of tax effect. The Revenue explained that the appeal was not initially filed due to a misunderstanding of the monetary limit set by the Central Board of Direct Taxes (CBDT). Upon realizing the error, the Revenue corrected the calculation and filed the appeal. The Tribunal accepted the explanation provided by the Revenue, considering the delay as a bonafide mistake rather than a willful default. Consequently, the Tribunal condoned the delay in filing the appeal.