Ashok Parshad Gupta Vs DCIT (ITAT Delhi)
ITAT Delhi held that mere presence of blank cheque without there being any other evidence, proving earning of any income or making of any capital transaction, the same cannot be treated as income. Accordingly, ground raised by revenue dismissed.
Facts- The assessee is engaged in the business of chemicals. Post search and survey operations, AO found that the assessee has made undisclosed income amounting to Rs.18,68,540/- during the year under consideration. Accordingly, he made addition u/s 69 of the Act. CIT (A) deleted the addition of Rs.7 lakhs and Rs.3 lakhs based on the finding that the assessee has made payment through cheques which were cleared through his bank account and Rs.3 lakhs as accumulated agricultural income for past years. Accordingly, addition of Rs.8,68,540/- was sustained by AO. Being aggrieved, assessee has preferred the present appeal.
Conclusion- Held that the assessee has declared the cash found during the search as additional income in his return of income and also submitted the information and source of the same. The AO also acknowledged the same and it was submitted that the assessee was handling the cash for commission from various persons, however, the AO himself rejected the same and treated the cash found and transactions carried on by the assessee as business. Since the assessee himself declared the above cash as additional income and explained the nature of transactions, the fact is that the assessee whether maintained the cash for a fees or as treated by the AO as assessee’s own cash and meant for financial transactions, it clearly indicate that the cash found during the search is relating to the business carried by the assessee. Therefore, the addition can be made as income under the head income from business or profession and not under the head income from other sources. Hence it cannot be treated as income falling within the nature of section 68, 69 to 69D of the Act so as to apply the tax rate prescribed in section 115BBE of the Act.
