Section 69A Addition cannot be made by merely stating that explanation is not acceptable

Vishnu Kumar Garg Vs DCIT (ITAT Delhi)

We find the A.O. in the instant case made an addition of Rs.12 lakhs to the total income of the assessee under section 69A of the I.T. Act, 1961 on the basis of entries dated 07.07.2010 and 07.08.2010 found as per Page-14 of Annexure-A1. We find the Ld. CIT(A) deleted the addition of Rs.2 lakhs and sustained the addition of Rs.10 lakhs the reasoning of which has already been reproduced in the preceding paragraph. It is the submission of the Learned Counsel for the Assessee that since the cash available with the assessee in various proprietorship concerns and companies in which he is a Director is Rs.12,80,198/-which is more than the figure of Rs.12 lakhs, therefore, no addition should be made. Alternatively, it is the contention of the Learned Counsel for the Assessee that addition on account of bogus purchases, if any, made in the hands of the assessee and other related concerns should be set-off against this amount.

We find some force in the arguments of the assessee. We find the assessee before the AO had categorically stated that Mamaji & Mataji were staying with the assessee and he used to handover business cash to them for safe custody whenever he used to go out of station for either business purposes or personal work. The assessee has also given the availability of cash on 07.07.2010 (the date of entry in the seized document) in the books of accounts of various proprietorship concerns and companies in which the assessee is a director at Rs.12,80,198.91/- which is more than the amount of Rs.10.00 lakhs. Therefore, merely stating that the explanation is not acceptable is not justified. Since, the availabilities of cash of Rs.12.80 lakhs on 07.07.2010 in the books of accounts of various concerns of the assessee is not doubted, therefore, we are of the considered opinion that the Ld. CIT(A) is not justified in sustaining the addition of Rs.10,00,000/-. The order of the Ld. CIT(A) on this issue is, therefore, set-aside and the AO is directed to delete the addition. The ground raised by the assessee is accordingly allowed.

FULL TEXT OF THE ORDER OF ITAT DELHI

ITA.No.9147/Del./2019 to ITA.No.9152/Del./ 2019 filed by the assessee are directed against the common order dated 30.09.2019 of the Ld. CIT(A)-23, New Delhi relating to A.Ys. 2011-12 to 2016-17 respectively. The Revenue has filed ITA.No.9448/Del./2019 for the A.Y. 2013­14 and ITA.No.9449/Del./2019 for the A.Y. 2014-15 against the relief granted by the Ld. CIT(A)-23, New Delhi in the order dated 30.9.2019. Since, common issues are involved in all these appeals, therefore, these were heard together and are being disposed of by this common order.

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