Cash Availability with Different Companies Sufficient to Explain Cash Found during Search

DCIT Vs Creamy Foods Ltd (ITAT Delhi)

Introduction: The Income Tax Appellate Tribunal (ITAT) Delhi has addressed the issue of unexplained cash found during a search operation in the case of DCIT vs. Creamy Foods Ltd. This article provides insights into the tribunal’s decision and the explanation offered by the assessee.

Search Operation Details: During a search and seizure operation in November 2017, cash amounting to INR 2,65,31,500 was found at various premises, out of which INR 2,09,99,150 was seized.

Assessment by Assessing Officer: The Assessing Officer treated the entire cash amount as unexplained income under Section 69A of the Income Tax Act, as the accountant, Shri Pradeep Mishra, could not reconcile the cash with the cash book.

Assessee’s Explanation:  The assessee contended that the cash found belonged to various companies within the SMC group, and the availability of cash was explained through the cash books of these companies. The cash was not segregated at the time of the search.

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