Gousmahammad Anwar Gavandi Vs. ITO (ITAT Pune)
Profits cannot be equated with cash in hand because the source of cash can be from cash sales or advances etc
Assessee, proprietor of Gavandi Tobacco Center, engaged in resale of tobacco products, filed return declaring income of ₹7,41,470 for AY 2020-21. On 16.04.2019, the Flying Squad of the Election Commission seized cash of ₹74,13,760/- from his possession. During enquiry u/s 131, assessee initially denied knowledge but later his brother Ganiahemad Gavandi admitted that the money belonged to five family members & further disclosed ₹12,85,606/- as additional income in his return. AO, however, disbelieved the explanation & added the entire seized cash of ₹74,13,760/- as unexplained money u/s 143(3), assessing total income at ₹81,55,230/-.
On appeal, CIT(A), Pune-11 granted partial relief by accepting some cash-in-h& shown in ITRs of family members as on 31.03.2019 but rejected claims of huge cash sales during the first fortnight of April 2019 as abnormal & manipulated. As a result, relief was given for ₹52,11,565/-, but addition of ₹22,02,195/- was sustained in the hands of four family members (including assessee).
Before ITAT, Assessee contested the sustained addition of ₹22,02,195/-, contending that cash balances reflected in ITRs of family members as on 31.03.2019 were genuine. Tobacco business is seasonal in nature; hence, higher sales in early April were possible.
