THAKUR FITNESS WORLD PRIVATE LIMITED,PHILLAUR, JALANDHAR vs. JOINT COMMISSIONER OF INCOME TAX (OSD), CENTRAL CIRCLE - JALANDHAR
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
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, AMRITSAR BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI UDAYAN DAS GUPTA, JM आयकरअपीलसं./ ITA No. 445/ASR/2024 (िनधा�रणवष� / Assessment Year: 2020-21) M/s Thakur Fitness World Pvt. Ltd. JCIT (OSD) बनाम/ B-7, Shop No. 72, Thakur Complex Jalandhar. 144001.. 1st Floor, Lakkar Mandi Vs. Phillaur, Jalandhar-144410 �थायीलेखासं./जीआइआरसं./PAN/GIR No. AAFCT-5466-K (अपीलाथ�/Appellant) (��थ� / Respondent) : अपीलाथ�कीओरसे/ Appellant by : Shri Kushal Chopra (CA) – Ld. AR ��थ�कीओरसे/Respondent by : Sh. Manpreet Singh Duggal- Ld. Sr.DR सुनवाईकीतारीख/Date of Hearing : 25-03-2025 घोषणाकीतारीख /Date of Pronouncement : 06-06-2025 आदेश / 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. 2. 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. 3. 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. 4. From the facts, it emerges that the assessee was required to explain the source of impugned cash of Rs.13 Lacs which was found from the possession of one of his employees. It also emerges that the assessee has two directors i.e., Shri Deepak Kumar and Shri Vimal Singh. The cash at the business premises of the assessee was being handled by Shri Deepak Kumar and collection of sales proceeds and other cash transactions were handled by Shri Vimal Singh from his office at Ludhiana. As per cash book, Shri Deepak Kumar was having cash in hand for Rs.4.27 Lacs whereas it had cash imprest of Rs.9.70 Lacs with Shri Vimal Singh as on 31-03-2019. Both these balances were duly reflected in audited financial statements for the year ending 31-03-2019. During the period from 01-04-2019 to 06-04-2019, Shri Vimal Singh received various cash payment aggregating to Rs.3.92 Lacs which increased imprest balance to Rs.13.63 Lacs which was in the possession of Shri Vimal Singh at Ludhiana. Out of this amount, Rs.13 Lacs was handed over to Shri Pawan Singh for delivering the same to Shri Deepak Kumar who would have transferred the amount from imprest account to cash-in-hand. All these facts were duly explained by Shri Deepak Kumar in his statement dated 13-05-2019 recorded before DDIT (Investigation). Quite clearly, the assessee had imprest closing cash balance of Rs.9.70 Lacs as on 31-03-2019 as per its audited financial statements. There is no other utilization shown for this balance. On these facts, in our considered opinion, the assessee
has duly explained the source of impugned cash of Rs.13 Lacs and accordingly, the impugned addition is not sustainable on facts of the case. We order so. 5. The appeal stand allowed in terms of our above order. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963.
Sd/- Sd/- (UDAYAN DAS GUPTA) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER लेखासद� /ACCOUNTANT MEMBER Dated: 06 -06-2025 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF ASSISTANT REGISTRAR
ITAT AMRITSAR
