SETT IRON FOUNDRY,HOWRAH vs. ACIT, CIRCLE-48, KOLKATA, KOLKATA

The only effective issue is to be decided as to whether the CIT-A is justified in confirming/treating the addition made on account of excess cash found during survey operation in the facts and circumstances of the case.

Heard both the parties and perused the record. According to AO, cash found as on 26-03-2010 i.e. the date of survey as per books is of Rs.1,88,047/-. During the course of assessment proceedings, as regards excess cash of Rs.3,37,493/- found, the assesse stated that personal cash balance of partners of M/s. Sudipta & Co., M/s. Puja Fund balance and employees’ leave fund were lying with assessee’s business premises and the AO found that the submissions of assesse were after thought. On perusal of the impugned order of the CIT-A, we find that the assesse reiterated its same submissions as made before the AO. However, the CIT-A did not accept the same. Before M/s.Sett Iron Foundry us the ld. AR pointed out page-1 of the paper book, which is a copy of reconciliation showing cash available as per cash book and cash physically found on 26-03-2010 and argued that employee’s leave encashment of Rs.25,000/- was withdrawn just one prior day to the date of survey and it was subsequently paid on 31-03-2010. Regarding an amount of Rs.2,66,114/-, it was pointed out by the ld. AR that the said cash was belonged to M/s. Sudipta & Co., whose business concern is also in the same floor as that of assesse. We find that this submissions of assesse made before the AO as well as before the CIT-A and were not considered by both the authorities below. It is seen from page-21 of the paper book, which is a copy of cash daily summary of M/s. Sudipta & Co. from 1-4-09 to 31-03- 2010, wherein it is noticed closing balance as on 26-03-2010 appears to be Rs. 2,66,114.41. It was also pointed out that in respect of money as found of Rs.51,072/- is of partner’s personal cash balance, Mr. Sudipta Kumar Sett. We find all these submissions were made before both the authorities below as could be seen from pages-3, 8 of the AO and CIT-A respectively, but, however, not accepted the same. In our opinion, the assesse placed evidences involving the excess cash found during the survey. Therefore, we find force in the arguments of the ld. AR. In view of above, we set aside the order of the CIT-A and addition of Rs. 3,37,493/- is deleted. Ground nos. 1 & 2 raised by the assesse are allowed.

In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 03-08-2018