Amount recorded in books and offered to tax cannot be treated as unexplained and added u/s 69A

Ramchandra Kanu Mendadkar Vs CIT (ITAT Mumbai)

ITAT Mumbai held that amount cannot be treated as unexplained and accordingly addition u/s 69A of the Income Tax Act unsustainable as amount duly recorded in books of account and offered to tax as professional fees.

Facts- The assessee is a practicing Advocate appearing in various Courts in and around Mumbai representing his clients in various streams of litigation for more than 35 years.

Notably, the assessee was travelling by Vistara Airlines from Mumbai to Delhi to attend two matters in Hon’ble Supreme Court At the airport, the assessee was intercepted and was searched. During the search proceedings the Officer found currency of note of Rs. 16,00,000/- and the same was recorded punchnamma. The summons U/s 131(A) of the Act was issued to the assessee for reccording statement in respect of seizure of cash of Rs. 16,00,000/-.

The assessee submitted that on instruction from his client Shri Biren Limbachiya and Shri Sagun Naik the assessee was to engage the senior counsel with the help of Advocate on records of the Hon’ble Supreme Court Mr. Sudhanshu Choudhari. The assessee submitted before the authorities that all these transactions were properly recorded in his books of accounts regularly maintained which are subject to statutory audited u/s 44AB of the Act. It was further submitted that the amounts were received during the course of his profession and see relate to any undisclosed income. A notice u/s 143(2) of the Act was issued.

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