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TMI Blog2024 (7) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been accepted. Thus, the prerequisites of Section 69A do not appear to have been fulfilled. Several judgments have been quoted on behalf of the assessee to contend that rejection of books is necessary to indulge in such addition. The action of the AO in our view, as rightly contended on behalf of the assessee has resulted in double additions which is not permissible in law. We thus see no rationale in confirming the additions towards unexplained cash under Section 69A in the facts of the case by granting credit only towards average cash balance rather than actual cash in hand at the relevant point of time. We note that as against the sale of Rs. 7,46,90,131/-, the assessee has declared a net profit ratio of 0.9% as against the immediately previous F.Y. 2017-18 where against the turnover of Rs. 2,02,83,095/-, the net profit ratio stands at 3.43%. Thus, there is a drastic fall in the net profit ratio vis- -vis earlier year. Hence, in the balance of things, additional business income @2.53% being difference in net profit ratio of turnover of 7.46 crore which stands at Rs. 18,89,660/- calls for addition attributable to cash sales in question. Thus, the additions to the extent of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only and has no other source of income. A search under Section 132 of the Act was conducted on 31.10.2018 to 17.12.2018 at the business premises of M/s. Faqir Chand Lockers and Vaults Pvt. Ltd. It was found by the Investigation Team that one of the lockers was allotted in the name of the assessee herein. Consequently, a search warrant was issued in the name of the assessee and was executed on 04.12.2018. During the search, cash of Rs. 1,70,00,000/- was found from the locker allotted to the assessee. As per assessment order, statement of the assessee was recorded under Section 131(1A) of the Act. Thereafter, the assessee filed return of income under Section 139 of the Act on 27.09.2019 declaring income of Rs. 5,31,150/-. Notice under Section 143(2) and 142(1) were issued to the assessee wherein the cash amount found in the locker was not admitted as income of the assessee. The AO, based on information gathered in the course of hearing towards month-wise turnover, cash sales and cash in hand for F.Y. 2016-17, 2017-18 and 2018-19 formed a view that the cash found and seized from the lockers remains unexplained. Based on average cash holding between April, 2018 to September, 2018 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pted the submissions of the assessee towards source of cash by holding that average balance of cash in hand between April, 2018 to September, 2018 comes to Rs. 37,38,533/- and thus allowed the credit of this amount of Rs. 37,38,533/- and made additions of remaining amount of Rs. 1,32,61,467/-. While doing so, the AO observed that in the statement recorded before the Investigation Wing, the assessee had admitted undisclosed income of Rs. 1,20,00,000/-. The additions made by the AO was confirmed by the CIT(A) on mis-appreciation of facts. (b) The Statement of assessee before Investigation Wing does not form the basis of the action of the AO. The AO has not made addition of Rs. 1,32,61,467/- on the basis of statement of the assessee. In fact neither the additions have been made based on so called confessional statement nor could have been made merely on the basis of bald statement in the light of the judgment of Hon ble Supreme Court in the case of Pullangode Rubber and Produce Company Limited vs. State of Kerala (1973) 91 ITR 18 (SC) wherein it is held that an admission made is not conclusive and it is open to the person who made the addition to show that it is incorrect. (c) The CBD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icularly where the assessee is engaged in cash sales in Kiryana goods. 11. The ld. counsel next adverted to additions made under the shelter of Section 69A and contended that provisions of Section 69A are not applicable in the facts of the case since the amount of cash found at the time of search is duly recorded in the books of account and such books including cash book has not been rejected by the AO at any point of time in the course of assessment and further contended that cash book is included in the definition of books of account as given in sub section (12A) of Section 2 of the Act. The ld. counsel adverted to the decision of the Co-ordinate Bench in Teena Bethala vs. ITO in ITA No.1383/Bang/2019 dated 28.08.2019 to submit that the onus is upon the AO to find that the assessee is the owner of any money, etc which was not recorded in the books of account which onus has not been discharged. The ld. counsel also referred to the decision rendered in the case of DCIT vs. Karthik Construction Co. in ITA 2292/Mum/2016, order dated 23.02.2018 to reiterate that Section 69A cannot be made in respect of those assets/monies/transactions which are recorded in the books of account. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is contrary to the admitted statement as well as documents placed on record and thus action of the Revenue cannot be assailed. 13. We have carefully considered the rival submissions and perused the material available on record as well as orders of both the authorities. 14. The assessee has disputed the addition of Rs. 1,32,61,467/- made by the AO under Section 69A of the Act towards unexplained source of cash in hand. The assessee has challenged the additions on legal ground such as lack of jurisdiction in appropriate approval under Section 153D and non-mentioning of DIN, etc. The assessee has also assailed the action of the Revenue on the factual matrix as well. It is the case of the assessee as recorded in the preceding paragraphs that complete details of purchases, sales and stocks including quantity details were provided in the course of the assessment. The relevant details such as party-wise sales, party-wise purchases were also filed together with cash book showing cash in hand in excess of the cash found in the course of search covering locker maintained with M/s. Faqir Chand Lockers and Vaults Private Limited. The books and the details so filed have not been rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X
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