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TMI Blog2023 (3) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... or thereafter that the cash was kept by his wife in the company, then the same is directed to be deleted. Grounds raised by the assessee are partly allowed for statistical purposes. - ITA No. 472/Hyd/2022 - - - Dated:- 17-3-2023 - Shri R.K. Panda, Accountant Member AND Shri Laliet Kumar, Judicial Member For the Assessee : Advocate Smt. S. Sandhya For the Revenue : Shri Kumar Aditya for Shri KPRR Murthy, DR ORDER Per R. K. Panda, A.M This appeal filed by the assessee is directed against the order dated 2.12.2022 of the learned CIT (A)-11, Hyderabad, relating to A.Y.2019-20. 2. Facts of the case, in brief, are that the assessee is a company engaged in the business of manufacture and sale of biscuits and allied products. A search seizure operation u/s 132 of the I.T. Act was conducted on 15.11.2018 in the case of the assessee along with M/s. Ravi Foods Pvt Ltd and Group cases. The assessee filed its return of income on 25.10.2019 admitting total income of Rs.3,71,18,230/-. The Assessing Officer issued statutory notices u/s 143(2) and 142(1) of the Act calling for various details to which the AR of the assessee appeared before the Assessing Officer f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Director of the company for a brief period is in the nature of unexplained cash u/s 69A of the Act. The Assessing Officer, therefore, made the addition of entire cash of Rs. 15,57,520/- found during the course of search seizure as unexplained cash u/s 69 A of the Act. 5. In appeal, the learned CIT (A) deleted an amount of Rs.10,51,395/- being cash balance available on the date of search in the books of account. He however, sustained the balance amount of Rs.5,06,125/- holding the same as not a bonafide explanation. Relevant observation of the CIT (A) from para 6 onwards reads as under: 6. The Decision: In the instant case, assessment was completed u/s. 143(3) of the T Act by making addition of cash of Rs. 15,57,520/- found during the course of search proceedings as unexplained money u/s. 69A of the IT Act to the income returned by the appellant. Going into the facts of the case, during the course of search operation, cash of Rs. 15,57,520/ was found at the premises of the appellant company and it is seen from the cash book of the appellant company that the cash balance on the date of search was Rs. 10,51,395/-. A sworn statement of the Sri S. Ganesh, accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Agarwal keeping cash available with her husband. in the premises of the appellant company without sufficient reason looks devo1d of logic and an afterthought. The director was covered u/s. 132 and he never made any such statement that he was in possession of his wife's cash as the appellant's business premise and this statement is recorded under 0ath and the director is duty bound to disclose the said fact especially when this being a one-off recent transaction. Therefore, it is concluded that it is not a bona tide explanation in respect of cash of Rs. 5,06,125/- as there is no nexus between the cash available with Smt. Greeshma Agarwal and the excess cash found at the appellant company's premises. Therefore, the addition of Rs. 5,06,125/- is upheld and the ground no. iii(c), v and vi are dismissed. The ground no. i, vii and viii are general in nature and need no separate adjudication. To sum up, the appeal is partly allowed. 6. Aggrieved with such order of the CIT (A) the assessee is in appeal before the Tribunal by raising the following grounds: 1. The order of the CIT(A) dt 26.10.2022 upholding the assessment order passed u/s 144(1)(b) dt.28. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that the amount should have entered into the books of account of the company and that the Accountant would have given the same explanation is incorrect since the amount was kept in the office of her husband for safe custody and not business cash and therefore, the same need not be entered in the books of account of the company. She submitted that Smt. Greeshma Agarwal has sufficient source because she had withdrawn an amount of Rs.45,00,000/- only on 13.11.2018 from the partnership firm Nirmay Constructions LLP which has not been disputed by either of the lower authorities. She accordingly submitted that the addition sustained by the CIT (A) should be deleted. 8. The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the CIT (A). He submitted that if the amount of Rs.5.00 lakhs was in fact kept by Smt. Greeshma Agarwal, then the same should have been entered in the books of account of the assessee company and it should have been in the knowledge of the Accountant who could have explained the same on the date of search. Since the learned CIT (A) has passed a detailed order on this issue, therefore, the same should be upheld and the grounds r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, it is neither coming from the assessment order or from the order of the CIT (A) or from the Paper Book filed by the assessee as to whether the Director of the assessee company Mr. Vimal Agarwal was asked any question on this issue on the date of search or thereafter. In our opinion, the statement of the Director Mr. Vimal Agarwal who was privy to such cash kept by his wife has a bearing on this vital issue. It is not known as to whether the Director was examined on the issue of cash of Rs.5.00 lakhs kept by his wife Mrs. Greeshma Agarwal which she has withdrawn from the partnership firm namely Nirmay Constructions LLP. Therefore, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to verify the statement of Mr. Vimal Agarwal, Director of the assessee company recorded u/s 132(4), if any, and if he has stated during the course of search or thereafter that the cash of Rs.5.00 lakhs was kept by his wife Mrs. Greeshma Agarwal in the company, then the same is directed to be deleted. Needless to say, the Assessing Officer shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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