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TMI Blog2016 (12) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... .15,51,400/- in the regular books of accounts of the appellant and as the Assessing Officer has accepted the books of accounts of the appellant by completing the assessment u/s. 143(3) of the I.T. Act, 1961 there is no justification to treat the above amount as unexplained investment of the appellant. 4. The learned Commissioner of Income Tax (Appeals)-IV is in error in holding that the ledger accounts produced before the Assessing Officer lack the credibility. The learned Commissioner of Income Tax (Appeals)-IV ought to have found that the accounts of the appellant is accepted by the Assessing Officer goes to prove that the ledger of the appellant is accepted and there is no justification for the learned Commissioner of Income Tax (Appeals)-IV to hold that the ledger account lack credibility. 5. The learned lower authorities ought to have found that the appellant had never denied to have given any amount to Shri Abdul Rasheed and Shri Sojumon. The lower authorities have misconstrued the statement of the appellant with regard to question No. 25 & 28 in his statement u/s. 131 dated 26/04/2007. 6. The grounds of appeal filed by the appellant before the first appellate authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pursuant to CIT's order u/s. 263 of the Act, the assessment was completed by adding a sum of Rs. 15,51,400/- u/s. 69A of the Act. The relevant finding of the Assessing Officer in making the addition u/s. 69A of the Act reads as follows: "9. The submission of the assessee have been carefully considered. It cannot be accepted for the reason that as per the statement recorded on 11-03-2009 Sri. Abdul Rasheed and Sri. K.A. Sojumon deposed that the cash seized by Mahe Police on 29-03-2007 was received from Sri. K.V. Prakashan on 27-03- 2007 and they started their journey in the evening of the same day to Ernakulam by bus and reached Ernakulam on 28-03-2007 morning. However, as per assessee's letter dated 15-10-2010, he submitted that the cash balance available as per his books of account on 27-03-2007 was Rs. 18,43,146/-. A sum of Rs. 16,00,000/- was taken from above balance and sent through Sri. Abdul Rasheed and Sri. K.A. Sojumon for purchase of Rubber. As per cash book of 2006-07 produced by the assessee, payment of Rs. 16,00,0001- for purchasing Rubber was recorded only on 28-03-2007. As deposed by the both persons, they got the money on 27-03-2007 evening and reached Ernakulam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sri. Manoj before or after 28-03- 2007. But, the amount of Rs. 48,600/- retained by Sri. Manoj is stated to be as the security for the business transaction. From the statement of the assessee it is clear that no business transaction was made between Sri. Manoj and Sri. K.V. Prakashan on 28.3.2007. Therefore, it is clearly establish that Sri. Manoj has received Rs. 16,00,000/- on behalf of Sri. K.V. Prakashan and his commission was retained and the balance is handed over to Sri. Sojumon and Sri. Rasheed to give the same to Sri.K.V.Prakashan which was seized by the police. iii. Assessee in his statement dated 26-04-2007 stated that he has not given any money to Sri. Sojumon and Sri. Abdul Rasheed but an amount of Rs. 48,000/- is due from Sri. Manoj being the advance given for purchase of rubber. Subsequently he has changed his first stand and own up the money as discussed in Para 3. iv. A statement was recorded from Sri. Manoj Kumar on 13-03-2009. He stated that Sri. Prakashan is having Rubber trade with them since 2005. But as per Sri. Prakashan's statement, he started his business since April 2006 and the first trade was recorded in his books of account in October 2006. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the assessee and dismissed the appeal. 7. Aggrieved by the order of the CIT(A), the assessee is in appeal before the Tribunal. The Ld. Counsel for the assessee reiterated the submissions made before the Income Tax authorities. The Ld. DR present was duly heard. 8. I have heard the rival submissions and perused material on record. Originally, the assessment was completed against Shri Abdul Rasheed, Shri K.A. Sojumon and the assessee by Deputy Commissioner of Income-tax, Central Circle-2, Kozhikode in the year 2010. The cash seized from Shri Abdul Rasheed and Shri K.A. Sojumon was assessed in their hands. There was no addition in the hands of the assessee on account of the cash that was seized. On appeals filed by Shri Abdul Rasheed and Shri K.A. Sojumon, the addition made was deleted by the CIT(A) on the finding that Sri K.V. Prakashan, (the assessee in this case) had shown Rs. 15,51,400/- under the head "Mahe Police" under Schedule - C deposits & advance, in the "properties and asset side" of the balance sheet as on 31/03/2007. He has also shown Rs. 48,600/- under the title "Manoj Kochin" under schedule advance paid to suppliers in the properties and asset side, as depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner is confirmed." 8.4 From the above direction of the Tribunal, it is very clear that the issue that has to be examined is whether the assessee has sufficient source/cash balance to explain the availability of cash in its regular books of accounts as on 27/03/2007 to hand over Rs. 16,00,000/- to Shri Abdul Rasheed and Shri K.A. Sojumon. The assessee has maintained regular books of accounts. The return for the assessment year 2007-08 based on the regular books of accounts was filed in response to notice u/s. 153A(a) r.w.s. 153C, declaring, total income of Rs. 1,28,850/-. The only addition made in the original assessment order completed vide order dated 31/12/2010 was u/s. section 40A(3) of the Act. In the course of original assessment proceedings, the assessee had filed a letter dated 30/09/2010. In para 5 of the said letter, the seized amount of Rs. 15,51,400/- from Shri Abdul Rasheed and Shri K.A. Sojumon was mentioned as being recorded in the regular books of account. The Assessing Officer, after examining the books of account and verifying the ledger, completed the assessment wherein no addition was made on account of cash seized from Shri Abdul Rasheed and Shri K.A. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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