THAKUR FITNESS WORLD PRIVATE LIMITED,PHILLAUR, JALANDHAR vs. JOINT COMMISSIONER OF INCOME TAX (OSD), CENTRAL CIRCLE - JALANDHAR

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ITA 445/ASR/2024Status: DisposedITAT Amritsar06 June 2025AY 2020-2021Bench: SHRI MANOJ KUMAR AGGARWAL (Accountant Member), SHRI UDAYAN DAS GUPTA (Judicial Member)4 pages

AI SummaryAllowed

Facts

During an assessment framed under section 143(3), the Assessing Officer (AO) added Rs. 13 Lacs as unexplained cash under section 69A read with section 115BBE after cash was seized from an employee of the assessee, M/s Thakur Fitness World Pvt. Ltd. The director of the company claimed the cash represented sales proceeds, but the assessee failed to provide concrete evidence at the time of seizure. The CIT(A) confirmed the addition.

Held

The Income Tax Appellate Tribunal held that the assessee had sufficiently explained the source of the Rs. 13 Lacs cash. The explanation involved the movement of cash between directors, specifically from an imprest balance held by one director, which was duly reflected in the audited financial statements and further corroborated by a director's statement. Consequently, the Tribunal found the addition made by the AO and confirmed by the CIT(A) to be unsustainable.

Key Issues

Whether the assessee had provided a sufficient explanation for the source of Rs. 13 Lacs cash seized from its employee, thereby challenging the addition made under section 69A read with section 115BBE.

Sections Cited

Section 143(3), Section 69A, Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, AMRITSAR

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI UDAYAN DAS GUPTA, JM

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2020-21 arises out of an order of learned Commissioner of Income Tax (Appeals)-5, Ludhiana [CIT(A)] dated 12-06-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 28-12-2019. The sole grievance of the assessee is confirmation of addition of Rs.13 Lacs. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. The assessee being resident corporate entity is stated to be engaged in manufacturing and trading of gym equipments and food supplements as well as well as trading of raw wool, PVC panels etc.

Pursuant to seizure of cash of Rs.13 Lacs from the possession of one Shri Pawan Singh on 07-04-2019, the impugned assessment was framed against the assessee. Shri Pawan Singh is stated to be an employee of assessee-company. The director of the assessee- company owned up the cash and stated that the cash was received against sale of gym set-ups and PVC wall fitting from Ludhiana and surrounding areas. However, the assessee failed to file concrete evidence in this regard. Consequently, Ld. AO added the same to the income of the assessee as unexplained cash u/s 69A r.w.s. 115BBE.

During first appeal, the assessee’s submissions were subjected to remand proceedings. The assessee pointed out that it had furnished cash book for financial year 2018-19 and also from 01-04-2019 to 05- 04-2019 along with seals invoices, journals, transportation documents, KYC details of customers to DDIT (investigation). The assessee stated that Shri Vimal Singh, Director was having cash balance of Rs.13.62 Lacs on 06-04-2019 out of which Rs.13 Lacs was delivered by him to Shri Pawan Singh for handing over the same to another director at Phillaur. During appellate proceedings, the assessee furnished Balance Sheet, cash flow statement and Profit & Loss Account along with performa invoice, copy of ledger account of different parties to support the availability of cash-in-hand in its books of accounts. However, Ld. CIT(A) confirmed the assessment, inter-alia, on the ground that the assessee had failed to produce the said documents at the time of seizure. Aggrieved, the assessee is in further appeal before us.