Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI MANISH AGARWAL
आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order dated 26.06.2023, passed by the CIT(A)-2, Bhubaneswar in I.T.Appeal No.Bhubaneswar-2/10589/2018-19 for the assessment year 2019-2020. 2. The only issue raised in this appeal is in regard to the addition of Rs.40,78,050/- made on account of cash found during the course of search conducted u/s.132 of the Act at the residence of the assessee on 27.02.2019. During the course of search, total cash of Rs.41,78,050/- was found, out of which Rs.35,00,000/- was seized by the department. During the course of search, in the statement recorded u/s.132(4) of the Act when the assessee was confronted with the source of the same, it was stated by the assessee in reply to question No.11 that the cash belonged to me, my family members and some of the group business concerns. The assessee during the course of assessment submitted the details of the persons and group company to whom such cash belonged to and also filed necessary documents in support of the same. However, the AO has not accepted the explanation tendered by the assessee along with the supporting details of source of income and made the addition. The ld. CIT(A) has partly allowed the appeal of the assessee by accepting the source of Rs.1,00,000/- claimed as belonged to the son of assessee Shri Samarjeet Sahoo.
Before us, the ld. AR of the assessee submitted that since beginning the assessee has categorically stated that the cash found belonged to himself, his family members and the companies which also reflects on his statements recorded u/s.132(4) of the Act, wherein reply to question No.11, he made the following statements :- Q.11 During the course of search at your resident premises, cash of Rs.41,73,250/- was found. Please confirm the same and explain the sources of cash found.
Ans.: I hereby confirm the same. The cash belongs to me and my family members and some of the business concerns which were brought to my residence for deposits in the bank accounts and payments to parties. 4. it is further submitted that out of total cash of Rs.41,78,050/-, a sum of Rs.16 lakhs belonged to a company M/s Eastern Confectionery Private Limited, A/4, Industrial Estate, Kendrapara, Dist: Kendrapara and remaining cash belonged to the assessee himself and his four other family members, which are tabulated as under :-
Sl. Name of the Date of Place of Search Amount No. persons Search Rs. 1 Suchitra Sahoo 28.02.2019 Arunodaya Nagar, 2,00,000 Cuttack 2 Abhismita Sahoo 28.02.2019 Arunodaya Nagar, 12,00,000 Cuttack 3 Hemlata Sahoo 28.02.2019 Arunodaya Nagar, 3,50,000 Cuttack 4 Samarjeet Sahoo 28.02.2019 Arunodaya Nagar, 1,00,000 Cuttack 5 Surendranath 28.02.2019 Arunodaya Nagar, 7,28,050 Sahoo Cuttack Total 25,78,050 5. In support of the same, the ld. AR drew our attention to paper book page No.12, which is copy of the return of income filed by the company M/s Eastern confectionery Pvt. Ltd. for the assessment year 2018-2019, wherein at page 20 of the paper book, total cash in hand of Rs.16,21,172/- is appearing. Further, the balance sheet of the company is also filed in the paper book. With regard to the claim of cash of Rs.2.00 lacs belonging to Smt. Suchitra Sahoo, wife of the assessee of Rs.2 lakhs. He took us to the page 111 of the paper book which is the copy of the return of income for the assessment year 2018-2019 of Suchitra Sahoo, wherein item No.6d, cash of Rs.123257/- is declared as on 31.03.2018. He further took us to cash flow statement of Suchitra Sahoo, where for assessment year 2019-2020 after taking the opening cash balance of Rs.123257/- and considering the cash inflow and outflow, the net cash in hand as on 31.03.2019 was of Rs.59,107/-, which is after reducing a sum of Rs.2,00,000/- seized by the Income Tax Department and claimed as belonged to her by the assessee.
Similarly, in the case of Abhismita Sahoo, daughter-in-law of assessee, it was claimed that Rs.12 lakhs belonged to her. In support of ITR for AY 2018-2019 was filed in the paper book where at page 134 of paper book in item No.6d, the cash balance of Rs.1423118/- is declared as on 31.03.2018 and in page 113 of the paper book cash flow of Abhismita Sahoo is filed where after reducing the cash seized by the Income Tax Department of Rs.12 lakhs, closing cash balance as on 31.03.2019 is shown as Rs.29,476.57.
In the case of Hemlata Sahoo, other daughter-in-law of the assessee, a sum of Rs.3,50,000/- as claimed to be belonged to her. In support of this, copy of ITR declaring cash of Rs.199131/- as on 31.03.2018 in item No.6d at page 94 of the paper book is filed. Also, cash flow statement available at page 80 of the paper book contains the source available with her in financial year 2018-2019 out of which Rs.3,50,000/- was seized by the department for a sum of Rs.150540/- was with her as on 31.03.2019.
In the case of the assessee himself, he claimed a sum of Rs.7,28,050/- as belonged to him and has filed copy of the ITR for A.Y.2019-2020 at pages 44 onwards. Cash flow statement is also filed at page 43 of the paper book. The source of the same is claimed as out of agricultural income at Rs.2,40,000/- stood received in cash alongwith other income and has declared the same in the income tax returns for A.Y.2019-2020. It is submitted by the ld. AR that such income has been accepted by the AO n the impugned order. Therefore, the availability of the cash in the hands of the assessee cannot be doubted. It is also submitted that the assessee has filed all these details of availability of cash in his hands and also in the hands of the family members and the companies with the lower authorities, who were failed to appreciate the same and made the addition. Therefore, ld. AR requested that the addition made by the AO and confirmed by the ld. CIT(A) deserves to be deleted.
On the other hand, ld. Sr. DR supported the order of the lower authorities and stated that the assessee has failed to substantiate source of cash claimed in the cash flow statement and also in absence of day-to- day cash book it could not be accepted that this much of the cash was available with the assessee, his family members and with the company. In the last, ld. Sr. DR requested for confirming the addition made by the AO and upheld by the ld. CIT(A).
After considering the submissions of both the parties, we find that the assessee at the time of search itself in the statement recorded u/s.132(4) of the Act has claimed that the cash belonged to himself, his family members and some of his business concerns, which were brought to his residence for deposit in bank and payment to parties. The relevant extract is reproduced supra. During the course of assessment proceedings all the necessary documents in support of the cash belonged to him and also his family members and companies were submitted. Admittedly, the department has not taken any contrary view in the hands of the other family members whose assessments were also completed after the search u/s.153A r.w.s.143(3) of the Act. Once the department has accepted the availability of cash in hand in the case of each individual and the company, there remained no reason to hold the same as unexplained in the hands of the assessee. Also, on perusal of the record, it is found that the statement of affairs and cash flow statement were filed and available with the lower authorities, who failed to appreciate the same. Once the source of the cash is accepted as well as the statement of affairs filed by the family members were not doubted in their own hands, no addition could be made in the hands of the assessee. In assessee’s own case also, agriculture and other income declared as received in cash has been accepted by the AO. In view of these facts and circumstances of the case, addition of Rs.40,78,050/- made by the ld. AO and sustained by the ld. CIT(A) is hereby directed to be deleted.
In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 24/04/2024.