Ritu Singhal Vs DCIT/ACIT (ITAT Dehradun)
ITAT Deletes Addition: Why Employee Bank Accounts Aren’t Unexplained Money; Cash Found During Search Explained by Cash Book: Addition Deleted; Tax Ruling: Cash Rich Business Justifies Cash-in-Hand Found During Search; Unexplained Cash Addition Quashed as Source is Supported by Books; Employee Salary Accounts Not Assessee’s Income: Section 69A Deletion
Assessee, proprietor of a petrol pump, faced additions u/s 69A on two counts — (i) ₹1.74 lakh treated as unexplained money lying in employees’ bank accounts, & (ii) ₹4.87 lakh as unexplained cash found during search.
AO alleged that Assessee controlled employees’ accounts & failed to explain cash found during search. CIT(A) partly confirmed both additions.
Before Tribunal, Assessee contended that the issue of employee accounts was already covered by ITAT’s decision in her own case for AY 2019-20 (ITA No. 224/DDN/2024), where it was held that salary accounts in employees’ names cannot be treated as Assessee’s unexplained income, as employees existed & operated their own accounts.
Tribunal, following its earlier decision, held that the credits in employees’ accounts belong to them, not to Assessee, & hence deleted ₹1.74 lakh addition.
Regarding the cash addition of ₹4.87 lakh, ITAT noted that Assessee maintained a petrol pump business with daily cash sales duly recorded. AO had accepted book results but ignored the cash book & auditor’s certificate proving sufficient available cash. Tribunal found the explanation plausible & supported by records, & accordingly directed deletion of this addition as well.
