MEERA GOYAL,DELHI vs. ASSISTANT COMMISSIONER OF INCOME TAX, DELHI

The two cases heard together as they involved common question of law on facts and therefore, are adjudicated together.

The facts are that during the course of search conducted in Goyal group on 10.01.2023 the case of Rs.1,10,00,000/- was found in Locker No. 542 maintained with South Delhi Vaults & Credits Ltd. and a cash of Rs.14,50,000/- was found at B-45, Maharani Bagh, New Delhi against which an addition of Rs.1,10,00,000/- was made in the hands of appellant Meera Goyal and Rs. 10,00,000/- in the hands of Suresh Chand Goyal. Apart from this cash the cash was also discovered during the course of search from various entities of Goyal group, thus, the total cash of Rs.3,74,65,604/- was found, out of which Rs.3,59,99,000/- was seized.

The case of assesse is that the cash seized from two assesse’s forms part of the total cash found and seized in the search. During the assessment proceedings assesse explained that the cash found and seized forms part of the duly recorded cash balances available with various entities of Goyal group, particularly M/s Goyal Capital MG Gases Pvt. Ltd. Assessee has tried to substantiate the same by cash book, audited financial statements, ledgers, reconciliation and other supporting documentary evidences. Assessee tried to demonstrate that aggregate cash in hand available with Goyal group as on the date of search was of Rs.4,10,60,052/- which was sufficient to explain and cover the entire cash found and seized aggregating to Rs.3,59,99,000/-, of which the cash found from the appellant constituted a small portion.

The AO, however, disregarded the aforesaid explanation and relied solely upon the tally data available during the course of search, which reflected cash- in-hand of only Rs. 54,20,908/-in the books of certain group entities. Consequently, the AO restricted the cash attributable in the hands of M/s Goyal MG Gases Pvt. Ltd. to Rs. 8,54,320/- as per tally data instead Rs. 3,69,02,334/- and denied credit for the balance cash while making additions under Section 69A in the hands of the Appellants and other group concerns.

Ld. Counsel has submitted that this approach is patently inconsistent, as M/s Goyal MG Gases Pvt. Ltd. was itself subjected to assessment pursuant to the same search action and the very same AO accepted the availability of cash- in-hand amounting to Rs. 3,69,02,334/- as on the date of search. It is submitted that in doing so, the AO overlooked the fact that the said tally data did not capture the complete financial records of all the group concerns, as some premises could not be searched and the financial records pertaining thereto were missed during the search proceedings. Therefore, the said data did not reflect the aggregate cash-in-hand available with the Goyal Group as on the date of the search.

In this context, we find that as this issue came before this Tribunal in case of another group entity Faridabad Implements Pvt. Ltd., a group entity of the Goyal Group, in ITA No. 4591/Del/2025., the co-ordinate bench, while adjudicating this issue, arising from the same search action, considered the case where cash amounting to Rs. 69,99,000/-was found, out of which Rs. 24,58,590/- was seized, whereas credit for the balance amount was granted on the basis that the same stood reflected as cash-in-hand in the Tally data relied upon by the AO. After examining the facts, the co-ordinate bench has held that the availability of cash-in-hand amounting to Rs. 3,69,02,334/- in the books of M/s Goyal MG Gases Pvt. Ltd. had never been disputed by the Department and, therefore, due credit thereof was required to be granted while explaining the cash found during the course of the search. The relevant findings of the bench are reproduced below: