PADAM SAIN GUPTA,DELHI vs. ACIT, CENTRAL CIRCLE, KARNAL

The Learned Counsel submitted that the Assessing Officer while making addition of Rs.3,00,000/- under Section 68 of the Act has only considered the first part of statement of assessee ignoring the second part of statement and factum of withdrawals of Rs.26,50,000/- immediately before search and seizure operation. The Learned Counsel, therefore, submitted that the addition of Padam Sain Gupta vs. ACIT 2 Rs.3,00,000/- is not sustainable in view of large cash withdrawal by the assessee immediately before the search and seizure operation.

The Learned CIT-DR strongly supported the orders of the authorities below.

Since from para 4.3, we clearly observed that Learned CIT(A) despite noticing that the assessee withdrew Rs.8,50,000/-, Rs.9,00,000/- and Rs.9,00,000/- on 15.12.2017, 18.12.2017 and 26.12.2017, total Rs.26,50,000/- immediately before the date of search, which was 22.01.2018. The Learned CIT(A) out of total cash seized during the course of search of Rs.10,00,750/- allowed part relief of Rs.7,00,750/- keeping in view amount of cash withdrawals by the assessee but confirmed the addition of Rs.3,00,000/- by observing that the appeals has not discharged his onus regarding said amount of Rs.3,00,000/- and thus the same remained unexplained.

In our considered view, when the assessee has huge cash withdrawals immediately before the date of search and in the second part of his statement, recorded during the course of search, replying to question no.24, he categorically stated that the cash withdrawals from the bank of Rs.26,50,000/- as well as Rs.3,00,000/- from contract totalling to Rs.29,50,000/- cash was available with him and out of said cash amount, there was renovation work was going on in his factory building at Madanpur Road. In our considered opinion, during search and seizure operation, the cash amount Rs.10,00,710/- was found and seized on 22.01.2018 and immediately before preceding month of December, 2017 there were withdrawals of Padam Sain Gupta vs. ACIT 3 Rs.26,50,000/- cash by the assessee, which is much higher than the cash amount seized during the course of search. Therefore, no addition could have been made in the hands of the assessee under Section 68 of the Act. Accordingly, sole grievance of the assessee is allowed and AO is directed to delete the addition.

In the result, appeal of assessee is allowed.