DINESH BHURA ,KOLKATA vs. ACIT, CIRCLE - 34, KOLKATA , KOLKATA

This is an appeal preferred by the Assessee against the order of the CIT(A)-10 dated 26th February, 2018 for assessment year 2015-16.

The main grievance of the assessee against the action of the Ld.CIT(A) in confirming the addition of Rs.8,17,738/- on account of unexplained money seized.

Brief facts of the case as noted by the AO is that during the course of search and seizure operation u/s 132 on 03.04.2014 cash of Rs.15,00,000/- was seized from the business premises of the assessee. So during the course of assessment proceedings, the assessee was asked as to why the said sum of Rs. 15,00,000/- should not be treated as undisclosed income. The assessee submitted that as on the date of seizure on 03.04.2014, he has cash balance on 02.04.2014 amounting to Rs. 2,41,192/-; and withdrawn an amount of Rs. 5,00,000 for business on the seizure date from his proprietorship M/s. Jet Road Carriers having current account with ING Vysya Bank, KKT Steet Branch, Kolkata – 700 007. Therefore, according to the assessee on the date of seizure he has cash balance amounting to Rs. 6,93,072/-. He also brought to the notice of the AO that he has also proprietorship concern in the name of M/s. Desan Road Services (Prop.) of Dinesh Bhura (HUF) at the same premises and also in the same room at 163 Rabindra Sarani, Ground Floor, Kolkata 700 007. It was also brought to the notice of the AO that on the date of seizure he had cash balance as on 02.04.2014 an amount of Rs. 3,19,128/- and withdrawn on account of the proprietorship of M/s. Desan Road Services having account with ING Vysya Bank on the same date he had withdrawn an amount of Rs. 5,00,000/- for business. Thus it was contended by the assessee that on 03.04.2014 before search he had cash balance amounting to Rs. 8,17,738/-. Thus he explained and reconciled before AO the amount of Rs. 15,00,000/-.

However the AO was of the opinion that after perusal of the document only Rs. 6,87,642/- has been duly accounted for by the assessee in his books of account and as per the audited balance sheet as on 31.03.2015, the assessee has shown cash seized Income Tax under the head “Loan and Advance” amounting to Rs. 6,87,642/-. Therefore, he treated the balance amount of Rs. 8,12,358/- as u/s 69A of the Act [however added Rs 8,17,738] and added to the income of the assessee. Aggrieved the assessee preferred and appeal before the Ld. CIT(A) who was pleased to dismiss the same. Aggrieved the assessee is before us.

We have heard both the sides and perused the records. The facts are not repeated for the sake of brevity. We note from the perusal of page 46 Paper Book which is the schedule forming part of the statement of account for the year ended on 31.03.2014of M/s. Desan Road Services (HUF) and particulars to schedule ‘D’ Cash & Bank Balance is to the tune of Rs. 3,19,802/-. Our attention was taken to page 63 which is of M/s. Desan Road Services (HUF) wherein we find at schedule H loans and advance cash seized by IT Department shown at Rs. 8,12,358/-. Our attention was drawn to page 78 which is the bank statement of M/s. Desan Road Services (HUF) in ING Vysya Bank wherein we note that the assessee had withdrawn an amount of Rs. 5,00,000/- on 03.04.2014. We note from the perusal of Page No. 77 which reveals the cash book of M/s. Desan Road Services wherein we note on 01.04.2014, opening balance of Rs. 3,19,128/- is reflected and on 03.04.2014 of Rs. 5,00,000/- was seen to have been withdrawn and cash seized of Rs. 8,12,358/- is shown on the credit side. It was also brought to our notice that the AO had issued notice of M/s. Desana Road Services wherein the assessee in capacity of karta of HUF is the proprietor had replied to the AO vide letter dated 28th March, 2016 which is reproduced as under:

It was brought to our notice that AO dropped further proceedings against the M/s. Desana Road Services (HUF). Thus we note that amount of Rs. 8,12,358/- of the M/s. Desana Road Services prop. Dinesh Bhura (HUF) stand proved and therefore reconciled with the amount seized on assesse’s premise on 03.04.2014. We note that M/s. Desana Road Services functions from the same premises where search was conducted, so the cash seized of Rs 15 lakhs in the facts discussed above include the amount of Rs. 8,12,358/- [ Rs 8,17,738]of M/s. Desana Road Services, so the AO erred in rejecting the explanation corroborated with the evidences as discussed above and therefore, the said amount cannot be added as undisclosed income of the assessee. Therefore we direct the deletion of the said addition.

The general grounds of appeal are dismissed.

In the result, the appeal of the assessee is partly allowed.