Faridabad Implements Pvt. Ltd. Vs DCIT (ITAT Delhi)
Summary: The ITAT Delhi allowed the assessee’s appeal and deleted the addition made under Section 69A of the Income-tax Act, 1961 in respect of cash found in a locker during a search in the Goyal Gases Group. The assessee had explained that the cash substantially belonged to M/s Goyal M G Gases (P.) Ltd. and represented cash accumulated from scrap sales.
The Assessing Officer treated INR 24,58,590/- as unexplained money and invoked Section 115BBE. The Tribunal found an unexplained inconsistency in the AO’s computation. Although the AO accepted that M/s Goyal M G Gases Pvt. Ltd. had cash-in-hand of INR 3,69,02,334/- based on its completed cash book, he adopted only INR 8,54,320/- as that company’s cash in another part of the assessment order and attributed INR 45,40,410/- to the assessee.
The Tribunal noted that no addition had been made in the hands of M/s Goyal M G Gases Pvt. Ltd. in respect of its cash-in-hand and that the Department had not brought contrary material to disprove the assessee’s explanation that part of that recorded cash was kept in the locker. Accordingly, the Tribunal held that due credit had to be allowed for the recorded cash and deleted the Section 69A addition. The appeal was allowed.
