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Income Tax Appellate Tribunal, DELHI BENCH: ‘D’ NEW DELHI
Before: SHRI BHAVNESH SAINI & SHRI PRASHANT MAHARISHI
ORDER PER SHRI BHAVNESH SAINI, J.M.
This appeal by assessee has been directed against the order of Ld. CIT(Appeals)-23, New Delhi dated 31.01.2015 for AY 2012- 13.
We have heard Ld. Representatives of both the parties and perused the material available on record.
Ld. Counsel for assessee did not press ground no. 2 of the appeal, challenging the addition of Rs. 3,28,175/- on account of unexplained investment in jewellery. This ground of appeal of assessee is, accordingly, dismissed as not pressed.
4. On ground no. 1, assessee challenged the addition of Rs. 7,58,400/- on account of cash found during the course of search.
5. The AO noted in the assessment order that during the course of search cash amounting to Rs. 42,58,400/- was found out of which Rs. 39 lakhs has been seized. The explanation of assessee was called for to explain the cash. The assessee submitted before the AO that she is proprietor of M/s Generation Next Computer Mart. The firm is engaged in trading of computers, accessories and parts. The firm is having office at B-1A, Bhagwati Tower, 39, Community Centre, Wazirpur Industrial Area, Delhi. The firm was maintaining cash balance in excess of Rs. 31 lakhs during the year. The balance cash was retained by assessee at home which was found during the course of search. Summary of the cash book was filed. Complete cash book was produced for verification. It was also submitted that assessee is also partner in firm M/s Pinnacle Fashions incorporated on 18.07.2006. The firm is engaged in job work of computerized embroidery. The firm was maintaining cash balance in excess of Rs. 12 lakhs during the year which was kept at home of the assessee which was found during the course of search. Copy of the balance sheet, profit and loss account and ITR were filed in support of the same. The AO, however, did not accept the explanation of the assessee and treated the entire cash as unexplained and made the addition of Rs. 42,58,400/-.
6. The addition was challenged before Ld.CIT(A). The Ld. CIT(A) accepted that Rs. 35 lakhs belong to the proprietorship concern of the assessee and to that extent benefit was allowed to the assessee and addition to that extent was deleted. However, as regards, the balance cash of Rs. 7,58,400/- belongs to the partnership firm, Ld. CIT(A) noted that books of accounts are not available, therefore, addition was confirmed. Ld. Counsel for assessee submitted that Departmental appeal has been dismissed by ITAT on account of low tax effect.
7. After considering the rival submissions, we are of the view that addition is wholly unjustified. The assessee has filed copy of the balance sheet of the partnership firm at page 35 of the Paper Book in which the cash in hand have been shown at Rs. 12,21,167/-. The assessee is a partner in this firm. The Ld.CIT(A) noted that assessee has not withdrawn any amount from the partnership firm. This reason is not sufficient to reject the explanation of the assessee. The assessee has explained that as a partner in partnership firm, she kept the cash in hand of more than 12 lakhs at house, which was found during the course of search. Therefore, explanation of assessee is supported by the balance sheet which was filed with the Revenue Department along with the return of income. Therefore, explanation of assessee cannot be rejected by the authorities below. The assessee has thus, explained balance cash found during the course of search. We, accordingly, set aside the orders of authorities below and delete the addition of Rs. 7,58,400/-. Ground no. 1 of appeal of assessee is allowed.
In the result, the appeal of assessee is partly allowed.
Order pronounced in the open court on 29.04.2019