SH. SURYA KANT JAIPURIA,NEW DELHI vs. ACIT, NEW DELHI

The Appellant, Shri Surya Kant Jaipuria (hereinafter referred to as ‘the assessee’) by filing the present appeal sought to set aside the impugned order dated 13.10.2015 passed by the Commissioner of Income-tax (Appeals)-24, New Delhi qua the assessment year 2012-13 on the grounds inter alia that :-

Assessee carried the matter by way of filing appeal before the ld. CIT (A) who has sustained the addition to the extent of Rs.11,48,000/- but deleted the remaining addition. Feeling aggrieved, the assessee has come up before the Tribunal by challenging the impugned order passed by ld. CIT (A).

We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.

Ld. AR for the assessee challenging the impugned order contended inter alia that during the course of search and assessment proceedings, the assessee has duly explained the impugned cash being belonged to Jaipuria Leo Software & Systems Pvt. Ltd. (JLSSPL) and have categorically stated in his statement that the books of account of the said company are maintained at Nagpur by Shri Pradeep Khode; that the Revenue has failed to controvert the findings that cash of Rs.11,48,000/- does not belong to JLSSPL, in which assessee and his family members are directors; that the ld. CIT (A) has sustained the addition of Rs.11,48,000/- despite the fact that the said cash actually belongs to JLSSPL and relied upon the decisions of ITO vs. C Atchaiah – 218 ITR 239 (SC), CIT vs. Nayan Engg Works – 248 ITR 596 (Mad.), S.R. Venkat Raman vs. CIT – 127 ITR 807 (Kar) and CIT vs. Kulwant Rai – 291 ITR 36 (Del.).

However, on the other hand, the ld. DR for the Revenue to repel the arguments addressed by ld. AR for the assessee contended that since the assessee has failed to discharge the onus to explain the cash amount, addition has been rightly made by the AO and sustained by the ld. CIT (A) and relied upon the order passed by the ld. CIT (A).

Undisputedly, the assessee has produced the cash book of JLSSPL for the entire year 2011-12 and has been thoroughly perused by ld. CIT (A) during the appellate proceedings wherein cash amount of different dates is shown to have been given to Vaibhav Jaipuria imprest. When ld. CIT (A) has not disputed the cash book containing entries as to amount of Rs.11,48,000/- in the hands of Vaibhav Jaipuria imprest, merely sustaining the addition on ground of preponderance of probabilities is not sustainable in the eyes of law.

Ld. CIT (A) also taken note of the fact that when the cash amount was given to Vaibhav Jaipuria at Nagpur office, it is difficult to digest that said amount find its way to the residence of assessee, Shri S.K. Jaipuria, New Delhi for safe keeping in the month of 2012. We are again of the considered view that when it is not in dispute that JLSSPL is owned by assessee and his family member and Vaibhav Jaipuria is not alleged or proved to be some third person not residing at Delhi, this reasoning is also not sustainable.

Furthermore in case, there is any discrepancy in the account of Vaibhav Jaipuria qua the imprest of Rs.11,48,000/- that has to be attributed to him (Vaibhav Jaipuria) and not to the assessee particularly when cash book of JLSSPL has not been disputed / rejected by ld. CIT (A). Moreover when the assessee has duly explained in his statement recorded during search operation that the amount belongs to JLSSPL and produced the cash book thereof, it cannot be considered as an afterthought of the assessee having been duly corroborated with the cash book perused and discussed by ld.CIT (A) in para 4.3 of the impugned order.

Not only this, when assessment of JLSSPL for AY 2012-13 was completed u/s 143 (3) of the Act and this cash book relied upon by the assessee qua the amount in question cannot be disputed on the basis of surmises. Assessment order passed u/s 143 (3) of the Act in JLSSPL is available at pages 90 to 93 of the paper book. Even AO has not disputed the genuineness of the cash book as has been mentioned in para 4.1.3 of the impugned order, which he has perused after tallying the balance of cash of Rs.15,41,020/- on 01.03.2012 and two entries of Rs.17,20,000/- and Rs.2,00,000/- as Vaibhav Jaipuria being shown as cash from Vaibhav Jaipuria from his imprest account prior to the date of search. In any case, the income has to be assessed in the hands of Vaibhav Jaipuria as well as JLSSPL who has produced the cash book being independently assessed. In these circumstances, when the cash book of the entire year has been perused by the ld. CIT (A) and entries therein have not been disputed, the addition sustained by ld. CIT (A) is not sustainable in the eyes of law, hence ordered to be deleted. Consequently, the appeal filed by the assessee is allowed. Order pronounced in open court on this 7th day of December, 2017.