9911796707
TMI Blog2021 (10) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... , the imprest account was fastened between cash withdrawal from United Bank of India and deposit into Bank of India in order to have control over these transactions. We notice that the imprest account is created as conduit between the bank transactions. We notice that the Ld. CIT(A) has examined the books of account which has also been confronted before the A.O. CIT(A) has also recorded a finding that all the transactions are duly recorded in the books of account. When all the transactions have been routed through the books of accounts, the question of undisclosed income will not arise. Hence we are of the view that the AO has made the impugned addition on surmises and conjectures only and accordingly, in the facts and circumstances of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacturing processing of packaged drinking water in water division. Besides, the assessee is also engaged in generation of power. The assessee was subjected to search on 18.12.2012 and accordingly the present assessments were completed u/s 143(3) r.w.s. 153A of the Act. 4. The issue urged by the revenue relates to the undisclosed income assessed by the AO in both the years. The facts relating to both the years are identical. The A.O. noticed that the assessee company has given advances to one of the Directors named Shri Prakash Ladhani and the same has been debited to Imprest Account . The aggregate amount of advances given was ₹ 1.74 crores and ₹ 2.51 crores respectively in the years relevant to assessment year 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was credited. It was submitted that the imprest account was used for accounting purposes only in order to exercise control over these transactions. Accordingly, it was submitted that the amount was not actually paid to Prakash Ladhani. Since the assessee has failed to furnish relevant details from cash book, the A.O. took the view that these amounts have been advanced to Prakash Ladhani outside the books of account. Accordingly, the A.O. treated the amount of ₹ 1.74 crores and ₹ 2.51 crores as undisclosed income of the assessee in assessment year 2011-12 and 2012-13 respectively. The Ld. CIT(A) deleted the additions and hence the assessee has filed this appeal before us. 6. We heard the parties and perused the record. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Shri Prakash Ladhani was not given any amount for his personal use, the provisions of section 2(22)(e) of the Act will also not apply. The Ld. A.R. submitted that the Ld. CIT(A) has correctly appreciated these facts and hence his order does not call for any interference on this issue. 8. We heard the rival contentions and perused the record. The decision rendered by Ld. CIT(A) on this issue are extracted below for the sake of convenience. 6.4 I have considered the submissions made and materials on record. It is seen that there was materials found in the search in the shape of a ledger account showing payments in cash to Sri Prakash Ladhani on different dates. It has been observed by the A.O. that in search proceedings, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India and deposited in Bank of India for expenses. It was explained that the appellant group had overdrawing situation and hence, cash was withdrawn and deposited in Bank of India where there were no credit facilities. In short, it was the claim that this cash shown in the seized ledgers were never used by Sri Prakash Ladhani and only for accounting purpose and to have a control over the extent of funds drawn from United Bank, the seized ledgers were prepared. This explanation of the appellant was not accepted by the A.O. since the cash book of the appellant was not produced and also the details of the expenses incurred by the appellant from out of the funds. 6.6 Before me the appellant has produced the cash book and the A.O. was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant has also filed the ledger account of United Bank of India to show that the cash withdrawal from the said bank account has been incorporated in the cash book of the appellant. The source of the cash payments as per the seized ledger stands established with regard to the cash withdrawals made from United Bank of India and duly recorded in the cash book of the appellant. The major objection of the A.O. in the assessment order is that the appellant had failed to produce the cash book and explain the source of the cash payments as per the seized ledgers. The appellant has now furnished the cash book and the ledger account in United Bank of India and bank of India to substantiate its explanation and stand before the A.O. The observations of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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