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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A.MOHAN ALANKAMONY
आदेश / O R D E R
Per A. Mohan Alankamony, AM:-
The appeal by the Revenue is directed against the order passed by the learned Commissioner of Income Tax (Appeals)-19, Chennai, dated 17.12.2015 in for the assessment year 2008- 09 passed U/s.250(6) r.w.s. 143(3) of the Act.
The Revenue has raised three grounds in its appeal however the crux of the issue is that the Ld.CIT(A) has erred in Ld.AO amounting to Rs.47,07,200/- sic 45,02,121/- towards unaccounted income.
The brief facts of the case are that the assessee is an individual engaged in textile business as partner in M/s. Sri Ganapathy Silks having branches at Coimbatore and Sankarankovil. A search U/s.132 of the Act was carried out in the residential premises of the assessee Shri G. Murugan at Door No.17, Ramasamiyapuram, 5th Street, Sankarankovil and simultaneously survey U/s.133A was carried out on the same date in the business premises and goodowns of the firm at Sankarankovil & Coimbatore wherein the assessee is a partner. Thereafter the assessee had filed his return of income for the assessment year 2008-09 on 31.12.2008 admitting total income of Rs.8,35,480/-. Subsequently notice U/s.143(2) of the Act was issued on 16.03.2009 and 30.09.2009. Finally assessment order was passed U/s.143(3) of the Act on 31.12.2009 wherein the Ld.AO made several additions amongst which one of the addition amounting to Rs.47,07,200/- pertains to addition towards cash seized from the residence of the assessee.
During the course of search in the residence of the assessee Shri G. Murugan, cash amounting to Rs.47,07,200/- was found and seized. The assessee could not properly explain the source of the amount of Rs.47,07,200/-. In the reply to question No.9 of the sworn statement by the assessee recorded on the date of search viz., “whether he had brought any cash from Coimbatore?”, the assessee had replied in the negative. Subsequently the assessee in his reply dated 12.11.2009 had explained that the cash balance as per the books of the Coimbatore Branch was Rs.2,15,08,121/- while as cash found in the Coimbatore Branch was only Rs.20,06,000/-. It was further explained that the assessee who had visited the Coimbatore Branch having found such huge cash balance carried the amount of Rs.1,97,00,000/- along with him and deposited Rs.1.5 crores in the firm’s account with Citi Union Bank, in Rajapalayam on his way back to Sankarankovil and the balance amount of Rs.47,00,000/- was retained by him keeping in view of the bonus payments to be paid during Diwali festival and to meet out petty expenses and payments to suppliers on the eve of Diwali. Thus the assessee explained the source of Rs.47,00,000/- found in his residence at the time of search. However the Ld.AO rejected the submission of the assessee presuming it to be an afterthought, because at the time of search the assessee had not furnished such explanation.
On appeal, the Ld.CIT(A) deleted the addition made by the assessee by observing as follows: “7. SECOND ISSUE: Addition on account of unaccounted cash found in the premises of the partner of the firm. for Rs. 47,07,200/- assessed substantively.
Cash of Rs.47,07,200/ - was found in the residence of the Appellant, who is one of the partners of the firm. In the course of assessment proceeding it was explained by the appellant that during his visit before Diwali at Coimbatore Branch, a huge cash balance of Rs.2,15,08,121/- remained undeposited as the Accountant was sick and he could not attend office. The Appellant had taken a sum of Rs.1,95,02,121/- leaving Rs. 20,06,000/- in the business premises at Coimbatore. On the way to Sankarankoil, the Appellant deposited Rs.1.5 crore in the firm's bank account at City Union Bank, Rajapalayam Branch. It was explained by the appellant that Rs.45,02,121/- was kept with the Partner for the purpose of using the same for festive season towards payment of bonus to the employees. Thus the amount available with the Appellant is Rs.45,02,121/- whereas the amount seized is Rs.47,07,200/-. On 31.10.2007 a sworn statement was recorded from the Appellant. In reply to the Question No.9 of the sworn statement as to whether he had brought any cash from Coimbatore, he had replied "No" but this was a leading question putforth from the Investigation side. It goes to prove that it was stated to the Investigation that the money was carried from Coimbatore without which putting this question to the partner will not arise. Before me the Authorised Representative explained that without knowing the implication and due to stress , the Appellant has given negative answer but while recording the statement at the residential premises of the Appellant, the spouse of the Appellant has stated in clear terms that his money was brought to the residence from business premises. Thus the circumstantial evidences goes to prove that Rs.45,02,121/- found in the residential premises of the Appellant is the amount brought from Coimbatore and stands explained. The Assessing Officer failed to prove that this money represents “undisclosed income”. Accordingly, the addition made on account of undisclosed income to the extent of Rs.45,02,121/- stands deleted and the remaining sum of Rs.2,05,079/- is confirmed in the hands of the Appellant as unexplained cash.”
Before us the Ld.DR argued in support of the order of the Ld.AO while as the Ld.AR relied on the order of the Ld.CIT(A).
We have heard the rival submissions and carefully perused the materials on record. From the Order of the Ld.AO itself it is apparent that there was cash-in-hand to the extent of Rs.2,15,08,121/- recorder in the books of accounts of the firm’s branch at Coimbatore, however there was only cash of Rs. 20,06,000/- physically available in the firm’s premises. Since search U/s. 132 of the Act in the assessee’s residence and the survey U/s133A of the Act in the assessee’s business premises (viz., in the firm’s premises in which the assessee is a partner) took place simultaneously there could not be any scope for removing the cash from the firm’s premises at the time of survey. Hence the shortage of cash balance in the firm’s premises can be correlated to the cash found in the assesse’s residence. Therefore the explanation tendered by the assessee that he had brought the cash from the firm’s premises at Coimbatore and deposited Rs.1.5 crore in the bank en-route to his residence in Sankarankovil and retained the balance amount with him, which was found and seized in his residence at Sankarankovil appears to be appropriate. In corroboration the assessee’s spouse had also stated that the assessee had brought the cash home. In this situation the source of the cash found in the residence of the assessee’s residence stands explained. The statement given by the assessee at the time of search cannot be given due weightage because it was a moment when the assessee was under stress and duress leading to confused state of affairs. Considering these facts the Ld.CIT(A) had rightly directed the Ld.AO to delete the addition of Rs.45,02,121/-. Therefore we do not find any reason to interfere with his Order. It is ordered accordingly.
In the result the appeal of the Revenue is dismissed.
Order pronounced on the 29th August, 2018 at Chennai.