Case Law Details
Kesarwani Sheetalaya Sahson Vs DCIT (ITAT Allahabad)
Conclusion: Where there was difference of amount in question somewhere as per cash in hand as per books of account and lesser cash as per seized documents, it would also not suffice to make addition under section 68 or 69A because every person is at liberty to spend their own amount anywhere as per his choice and assessee had not claimed any deduction in this case. Examining the case of assessee from every possible angle, addition of Rs.37,30,710/- was wholly unjustified.
Held: Assessee was a partnership firm engaged in cold storage business with its head office at Sahson AO found that actual cash with the concerns of assessee was Rs.27,39,932.86/- whereas assessee had shown the cash at hand at Rs. 64,70,642.65/-, meaning thereby the cash amounting to Rs.37,30,709.79/- was unexplained. AO had observed that the excess cash shown in the balance sheet may either relate to bogus liability or unexplained cash from undisclosed source introduced by the partners. AO further remarked that assessee had not maintained regular books of a/c in the shape of cash book, ledger etc. The search & seizure action did not result in recovering any books of a/c from the business premises of the firm or from the residential premises of the partners of the firm. AO had treated Rs. 37,30,710/- as bogus liability and had made the additions u/s 68. It was held that it was not a case where money was not recorded in the books of account of assessee. Assessee maintained regular books of account in past, on which regular assessments had been framed, had not been disputed during the course of arguments. Merely because the books of account maintained by assessee were not found during the course of search was no ground to reject the books of account produced by assessee before AO. Since the balances were coming up from the earlier years, therefore, it was the duty of AO to have scanned the entire cash book in order to say that the cash balance shown in the books of account in hand at Rs.64.70 lacs was correct or not, but AO did not do any exercise and merely comparing the seized paper from the audit report made the addition. AO was not definite in his finding while making the addition because he was of the view that either the bogus liability had been created or unexplained cash had been introduced by the partners and for both the propositions, AO had not brought any evidence on record to substantiate his allegations. On the one hand, AO relied upon the balance sheet and the audit report prepared by assessee showing excessive cash in books and on other side considered the seized paper which had shown lesser cash in hand for the purpose of making addition. It was clear that AO had done only artificial working of lesser cash as against higher cash shown in the books of account of assessee. Therefore, it was neither a case of addition u/s. 68 nor section 69A. Examining the case of assessee from every possible angle, addition of Rs.37,30,710/- was wholly unjustified.
FULL TEXT OF THE ORDER OF ITAT ALLAHABAD
This appeal by the assessee is directed against the order of ld. CIT(A), Allahabad dated 06.08.2012 for the assessment year 2008-09 on the following grounds :
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