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Income Tax Appellate Tribunal, “(A
Before: Shri A. T. Varkey, JM ]
This appeal is preferred by the assessee against the order of Ld. CIT (A), 1, Kolkata dated 25-04-2019 for the assessment year 2012-13.
The main grievance of the assessee is against the action of the ld. CIT(A) in sustaining the addition of Rs. 20 lakhs made by the AO u/s. 68 of the Income-tax Act, 1961 ( in short, the ‘Act’ hereinafter).
Brief facts of the case as noted by AO are that in this case on 27-05-2011 an information was received by the Air Intelligence Unit at Bangalore International Airport that one Shri Suresh Kumar (the assessee), Prop of M/s G.S Mani Fabrications travelling to Bangalore by Kingfisher flight No. IT-2404 was carrying cash of Rs. 20 lakhs from Chennai. So, the assessee was intercepted at Bangalore International Airport on 27.05.2011 and during the interrogation the assessee declared that he has his business of fabrication at Port Blair and he was carrying the money from Port Blair for his daughter’s marriage, and the cash has been withdrawn from the Syndicate Bank at Port Blair and he has also stated that the money has been accounted in his books of accounts. The AO noted that the assessee could not produce the evidence of Subramani Suresh Kumar withdrawal and the evidence of accounting the same in his books of accounts. Thus, Rs. 19 lakhs was seized and necessary appraisal report and Panchanma and other documents were sent to the jurisdictional AO i.e. ITO, Port Blair for other verification. Pursuant to the search and seizure, notice u/s. 153A was issued on 05.09.2013. Thereafter, notice u/s. 143(2) & 142(1) were also issued to the assessee on 17.03.2014. In response to the notices, Mr. A.H Badat, FCA appeared from time to time and produced bank statement, cash flow statement, total books of accounts which were test checked, source of deposit in the bank were also test checked. According to AO, from the statement given by the assessee at the time of search operation, the assessee himself stated that the source of cash of Rs. 20 lakhs is from the cash book. So, in order to ascertain this fact the ITO, Port Blair visited the office of the assessee and found out that the assessee has not maintained any books of accounts from 01.04.2010 to 31.03.2011 and also from 01.04.2011 till the date of search operation i.e. on 27.05.2011. The ITO, Port Blair also ascertained that the assessee is only keeping sales and purchase files. Thus, the AO opined that there is reason to believe that the source of cash is a mere afterthought and so according to him, the source of Rs. 20 lakhs produced by the assessee cannot be accepted , and so, the same was treated as undisclosed income of the assessee and added back to the total income. Aggrieved, the assessee preferred an appeal before the ld. CIT(A), who was pleased to sustain the same by observing as under:- “3. An information was received by the Air Intelligence Unit at Bangalore International Airport on 27.05.2011 that one Shri S. Suresh Kumar, Prop of .G.S. Mani Fabrications travelling to Bangalore is carrying cash of Rs.20,00,000/- from Chennai. Subsequently the assessee was intercepted at Bangalore International Airport on 27.05.2011 and during the interrogation the assessee declared that the has his business of fabrication at Port Blair and he has stated that the money has been withdrawn from the Syndicate Bank at Port Blair. The assessee has also stated that the money has been accounted in his Books of Accounts. But he could not produce the evidence of withdrawal and the evidence of accounting the same in his Books of Accounts.
Notice u/s. 153A of the Income-tax Act, 1961 was issued. Subsequently, statutory notices u/s. 143(2) and u/s. 142(1) of the Income-tax Act, 1961 were also issued which day was fructified into an order u/s. 143(3)/153A of the Income-tax Act, 1961 on 28.03.2014. Addition has been made which has resulted in the assessee filing an appeal. Mr. Ahmed Badat, F.C.A., appeared on behalf of the assessee.
5. The assessee has filed an appeal and has opted for eight Grounds of Appeal. Grounds of Appeal No. 7 and 8 are general in nature and, therefore, are not being adjudicated. I am adjudicating the Grounds of Appeal No. 1 to 6 in a consolidated manner. It appears Subramani Suresh Kumar from the impugned order dated 28.03.2014 issued Under Section 143(3)/153A of the Income-tax Act, 1961 that an addition of Rs.20,00,000/- was made. The assessee has filed an appeal. During the course of hearing before the Id. A.O., it is observed that the assessee had been intercepted at Bangalore International Airport on 27.05.2011. During the course of statement recorded, it was stated by the assessee that he pursued the business of Fabrication at Port Blair and he was carrying money from Port Blair. It was also stated that money had been withdrawn from Syndicate Bank at Port Blair. He has also stated that the money had been accounted in his Books of Accounts.
It is observed from the order of the Id. A.O. that the assessee had stated that he had accounted the said money in the Books of Accounts. However, during the course of investigation done by the Ld. A.O. that there were no Books of Accounts of the assessee. He has only been keeping sales and purchase details/files.
The matter had come before me. The ld. A.O. stated as following in a report dated 29.01.2019 as follows:-
"The assessee was engaged in Fabrication Job at Port Blair. One Shri S., Suresh Kumar, Prop: of MI s. G. S. Many Fabrication was travelling to Bangalore by Kingfisher Flight No. 2404 and carrying a cash amounting to Rs. 20, 00, 0001 - from Chennai. Subsequently the assessee was intercepted at Banqalore International Airport on 27.05.2011. During the interrogation at Port Blair, the assessee has stated that he is carrying money from Port Blair for the marriage. The money was withdrawn from Syndicate Bank at Port Blair. The transaction has been duly accounted for in his books of accounts. Accordingly, issue letter dated 15-01-2019 has been sent to the assessee requiring relevant details in support of his claim. In compliance with the said letter the assessee has furnish the Marriage Certificate, cash book, bank Book and highlighting the transaction which are perused and observed that the said money was actually required for the purpose of marriage. The above report may kindly be treated as remand report and the delay for submission of such report may kindly be condoned. However, the higher authorities may consider the factual decision on this issue.
The Id. A.O. has not found anything against the assessee in the Remand Report. However, regular Books of Accounts had not been maintained by the assessee. Books of Accounts has been defined in the Income-tax Act, 1961 in Section 2( 12A) of the Income- tax Act, 1961. It is a fact that no Books of Accounts were maintained which can be called as legitimate Books of Accounts. As per Section 2( 12A) of the Income- tax Act, 1961 Books of Accounts are as follows:- "[(l2A)books or books of account includes ledger, day-books, cash books, account- books and other books, whether kept in the written form or as print- outs of data stored in a floppy, disc, tape or any other form of electro-magnetic data storage device.]
The assessee has stated as ascertained from the order of the Id. A.O. and not denied by the assessee that the source of cash of Rs.20,00,000/- was from the cash book. However, LT.O., Port Blair, has visited the office of the assessee and it was found that Subramani Suresh Kumar the assessee had not maintained any Books of Accounts from 01.04.2010 to 31.03.2011 and also from 01.04.2011 till the date of search operation i.e. on 27.05.2011.
The Id. A.O. in the report filed has not deliberated on this vital finding of fact while submitting his report which is cryptic in nature. Reliance is placed on the Apex Court's decisions of Sumati Oayal vs. CIT [214 ITR 801] and also Durga Prasad More [82 ITR 540], while adjudicating the issue.
In view of the above, 1 have no option but to dismiss the appeal of the assessee The Remand Report of A.O. is rejected too.”
4. Aggrieved by the Ld CIT(A) order, the assessee is before this Tribunal. I have heard both the parties and perused the records. I note that the AO has made the addition of Rs. 20 lakhs on the basis that during the search and seizure operation carried out at Bangalore Airport on 27.05.2011, the assessee made a statement that the source of cash which he was carrying along with him was from cash book maintained by his proprietary concern M/s G.S Mani Fabrications and since the ITO, Port Blair after a visit at the business premise of assessee ascertained that assessee did not maintain any books of account during the period till the date of search. However, during the appellate proceedings before the Ld. CIT(A), the AO in his remand report reproduced [supra], has categorically given a finding ‘In compliance with the said letter the assessee has furnish the Marriage Certificate, cash book, bank Book and highlighting the transaction which are perused and observed that the said money was actually required for the purpose of marriage’’. So, I find that the basis on which the AO saddled the addition of Rs.20 lakhs (absence of cash book etc.) is found to be erroneous. So the foundation on which the AO has framed the assessment for making addition of Rs.20 lakhs has disappeared, consequently the super structure built on the foundation falls. This is based on the legal maxim “Sublato Fundamento Credit Opus” meaning in case a foundation is removed, the super structure falls. In Badrinath Vs. TamilNadu AIR 2000 SC 3243 the Hon’ble Apex Court held that once the basis of proceedings is gone, all consequential order and acts would fall in the ground automatically which is applicable to judicial and quasi judicial proceedings. Moreover, we note that for the previous AY i.e. AY 2011-12, the Return of Income (ROI) was filed by assessee on 30.09.2011 and that AO has accepted the ROI wherein assessee has returned total income of Rs.10,85,354/- u/s. 143(3) of the Act dated 28.03.2014 which means the assessee had in his hands this amount as opening balance for this AY 2012-13[ relevant year under consideration]. Taking this fact as a backdrop, when we looked into the cash book of the assessee’s proprietary concern (G. S. Mani Fabricator) from 01.04.2011 to 27.05.2011 (placed at pages 4 and 5 of paper book) we note that opening balance as on 01.04.2011 is Rs.10,53,973/- and the assessee had on 14.05.2011 brought forward cash balance at Rs.11,71,666/- with the proprietary concern. And on 24.05.2011 and 26.05.2011 deposited total Rs.14,11,50,000/- and withdrew on 26.05.2011, Rs.20,10,000/- only. These facts as recorded in the cash book are corroborated by Syndicate Bank account statement of assessee (page 6 of paper book) and that of the proprietary concern M/s. G. S. Mani Fabricator at (page 7 and 8 of paper book). Thus, the finding of AO given in the remand report is correct and, therefore, the assessee has been able to explain the source of Rs.20 lakh found during search on 27.05.2011 at the Bangalore International Airport to the satisfaction of AO and also it is noted that the assessee carried the money for the purpose of marriage which got postponed to 19.08.2011 (pages 11 and 12 of paper book). So, the addition of Rs. 20 lakhs needs to be deleted and we order accordingly. Therefore, the appeal of assessee succeeds and is allowed.
In the result, the appeal of the assessee is allowed.