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TMI Blog2016 (10) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Mr. Ajay B. Sabharwal whereby the contention of M/s Le Shark Exports Pvt. Ltd to adjust the said cash of ₹ 20 lacs against advance tax was rejected by the Revenue. In our opinion, addition is not sustainable in the hands of the assessee as the assessee has duly discharged his burden and has duly rebutted the presumption which arose u/s 132(4A) of the Act with cogent evidences brought on record as set out above that the cash of ₹ 20 lacs which the assessee was carrying while flying from Delhi to Mumbai on 28-11-2006 in-fact belonged to Le Shark Exports Pvt. Ltd who also owned up the said cash of ₹ 20 lacs for which cogent material is brought on record. Addition of ₹ 20 lacs made by the Revenue in the hands of the assessee as undisclosed income is therefore ordered to be deleted. We order accordingly. - I .T.A. No.6048/Mum/2010 - - - Dated:- 25-8-2016 - SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Shri B.V. Jhaveri For The Revenue : Dr. Gulshan Raj ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee company, being ITA No. 6048/Mum/2010, is directed against the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Sabharwal were recorded. The A.O. observed from the records that Mr. Anil Shah, Director of M/s Le Shark Exports Pvt. Ltd. who was looking after the manufacturing unit at Tirupur, came to Mumbai from Coimbatore on 20th October, 2006 reportedly carrying the cash of ₹ 20 lacs. As per the bank statement of Le Shark Exports Private Limited produced, the cash was withdrawn from Corporation Bank. Tirupur on 19th October, 2006. Copy of cash book of Tirupur unit of Le Shark Exports Private Limited reflects sending of money through Shri Anil Shah, M.D. which was handed over to Mr Anil Shah on 19-10-2006 and the cash was brought to Mumbai by Mr Anil Shah on 20-10-2006 and kept at the registered office of M/s Le Shark Exports P. Ltd. , but there was no corresponding entry of receipt of cash in the cash book maintained at the registered office of the assessee company at Mumbai. In the written submission, it was stated that the cash was kept in the safe custody of Mr. Kiran Bhat, Accountant of Le Shark Exports Private Limited at the Mumbai Office. It was asked as to why the cash was not recorded in the cash book of Mumbai office and kept in bank since actual date of travel by Mr. Sabh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r which specified carry of money on behalf of M/s Le-Shark Exports Pvt. Ltd. It was observed from the submission that the cash was brought by Shri Anil Shah, M.D. of M/s Le Shark Exports (P) Ltd. at the time of his visit to Mumbai from Coimbatore on 20th October , 2006 and therefore it is clear that Mr. Shah reached Mumbai on 20th October, 2006. The A.O. doubted the whole story. Copies of air ticket in respect of Shri Ajay Sabharwal were also not submitted and therefore verification of date of purchase of ticket from Mumbai to Delhi could not be verified and also Mr. Ajay Sabharwal decided to return to Mumbai from Delhi on 28th November, 2006 and the particulars of the Air ticket was also not provided and hence could not be concluded that return of Shri Ajay Sabharwal to Mumbai was decided on 28th November, 2006. The A.O. observed that the normal place of work of Shri Anil Shah was at Tirupur and no evidence that Shri Anil Shah was in Mumbai on 28th November, 2006 i.e. the date of authority letter has been brought on record . Shri Ajay Sabharwal in his statement recorded on 28th November, 2006 stated that he was not in a position to state that cash was disclosed at the airport in C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counted cash of the said company, hence, there was no ground for a bonafide belief that the cash was undisclosed cash of the assessee. Thus, the assessee prayed that the proceedings u/s 132 of the Act were bad in law. The ld. CIT(A) rejected the contentions of the assessee and observed that the assessee has challenged the proceedings under section 132 of the Act. An amount of ₹ 20 lakhs was found in possession of the assessee at the Delhi Airport and the same was seized by the Mumbai Income Tax authorities as the source of the cash has not been properly explained by the assessee. Hence, there was reason to believe that the money has not been disclosed or will not be disclosed as income. Thus, there was a bonafide belief for taking action u/s 132 of the Act. The assessee submitted that the Revenue has erred in assessing the seized cash as undisclosed income. The assessee submitted that the assessee was carrying authority letter from Le Shark Exports P. Ltd. while travelling from Delhi to Mumbai. The necessary documents like cash book, bank statement reflecting the withdrawal, confirmation from the company that the cash belongs to them and PAN card , the audited balance shee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot convincing/acceptable and contradictory. It was observed by the ld. CIT(A) that Shri Ajay Sabharwal reached Delhi on 28th November, 2006 and returned to Mumbai on the same day hence it is clear that he had hardly got very limited time for inspection of quality and type of machine etc. to be purchased for Le Shark Exports Private Limited . No consultation regarding requirement of any particular machine had taken place between Mr Ajay Sabharwal and Mr Anil Shah. No Air ticket was brought on record by the assessee for verification with regard to the date of purchase of ticket from Mumbai to Delhi. The ld. CIT(A) thus held that source of cash amounting to ₹ 20 lakhs found in possession of the assessee was not properly explained and he miserably failed to establish that the said amount belonged to M/s Le Shark Exports P. Ltd., hence, the addition made by the A.O. was confirmed by the ld. CIT(A) as unexplained income of the assessee, vide appellate order dated 28-04- 2010. 5. Aggrieved by the appellate order dated 28-04-2010 passed by the ld. CIT(A), the assessee is in second appeal before the Tribunal. 6. The ld. Counsel for the assessee submitted that addition of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Income Tax authorities within 5 hours of interception whereby Le Shark Exports P. Ltd explained that cash belonged to them and they owned the cash. The ld. Counsel submitted that Shri Anil Shah, Director of Le Shark Exports P. Ltd. who brought the cash from Coimbatore to Mumbai on 20th October, 2006 and copy of the air ticket is placed on record (Flight No. DN 616) (page 12/pb) . He went back to Coimbatore on 27th November, 2006 by Jet Airways, copy of the Air Ticket is also placed on record vide paper book page No. 13. The cash was kept by Shri Kiran Bhat, Accountant of Le Shark Exports Private Limited in Mumbai in the office of Le Shark Exports P. Ltd . It was also submitted that the said company has owned the cash and the same are reflected in their books of account. Assessment was framed u/s 143(3) of the Act in the case of Le Shark Exports P. Ltd for assessment year 2007-08 and copy of the assessment order is placed on record (PB No. 74-75) and no addition has been made in the hands of Le-Shark Exports Pvt. Ltd. . It was pointed out that the Revenue has mentioned in the assessment order of Le Shark Exports P. Ltd that the cash of said Le Shark Exports P. Ltd was acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also produced before the DDIT (Inv.), the bank statement, copy of PAN , cash book and confirmation owning the cash of ₹ 20 lacs found in possession of the assessee . The above documents were produced with in five hours of interception of the assessee by the Income tax authorities. The said cash of ₹ 20 lacs was seized by the Income tax authorities from the possession of the assessee on 28/29th November 2006 It is also observed that Shri Anil Shah, Director of M/s Le Shark Exports Pvt. Ltd. who travelled from Coimbatore to Mumbai on 20th October, 2006 by Air Deccan flight (copy of the ticket is placed on record vide PB No. 12) and he again travelled back from Mumbai to Coimbatore on 27th November, 2006 by Jet Airways flight (copy of the air ticket is placed on record vide PB No. 13) and it is submitted before us that cash was brought to Mumbai from Coimbatore by said Mr Anil Shah on 20-10-2006 while the said cash was withdrawn from bank account at Corporation Bank , Tirupur of M/s Le Shark Exports Pvt. Ltd. on 19- 10-2006 , bank statement is placed in paper book. The said cash is duly reflected as advanced to Sh Anil Shah by M/s Le Shark Exports Pvt. Ltd for advance for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought on record authority letter from Le Shark Exports Pvt. Ltd. at the time of his flying when the assessee was carrying the cash of ₹ 20 lacs while travelling on 28-11-2006 that the money belonged to M/s Le Shark Exports Pvt. Ltd and the assessee was carrying the same for the purposes of purchase of machinery on their behalf. When the assessee was intercepted and taken to office of the Revenue at Mumbai, he has produced all the relevant documents within a span of five hours from Tirupur office of Le Shark Exports Private Limited by FAX before the authorities below whereby it has categorically been mentioned that the money consisting of cash of ₹ 20 lacs belonged to Le Shark Exports Private Limited , thus the said company owned up the money immediately on being asked to do so as also the assessee was carrying with him the authority letter while travelling on 28-11-2006 from Delhi to Mumbai when the money was found in his possession which he immediately brought to the notice of the authorities vide the authority letter of Le Shark Exports Private Limited dated 28-11-2006 stating that cash belonged to Le Shark Exports Private Limited. All the evidences were produced be ..... 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