M/s A.P. Refinery Pvt. Ltd., Jagaron V. DCIT, CC-1, Ludhiana

ITA 1279/CHANDI/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4453 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 25-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARVIND SUDARSHAN
• Keywords: Unexplained expenditure; Deemed to accrue or arise in india
• Section: 68; 69; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A , CHANDIGARH (VIRTUAL COURT) , ! ' # , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.1279/CHD/2019 / ASSESSMENT YEAR : 2017-18 M/S A.P. REFINERY PVT. LTD. VILLAGE TAPPER HARNIA, JALANDHAR ROAD, JAGRAON, DITT: LUDHIANA THE DCIT CENTRAL CIRCLE-1, LUDHIANA ./PAN NO: AAFCA1352B /APPELLANT /RESPONDENT /ASSESSEE BY: SHRI ASHWANI KUMAR, CA SHRI ADITYA KUMAR, CA ! / REVENUE BY: SHRI ARVIND SUDARSHAN, JCIT ' # /DATE OF HEARING : 05/10/2020 $%&' /DATE OF PRONOUNCEMENT:. 16/10/2020 /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER : THE ABOVE APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, LUDHIANA [(IN S HORT REFERRED TO AS CIT(A)] DATED 02/08/2019, RELATING TO ASSESSMENT YEAR 2017-18 , PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 2. GROUND NO. 1 RAISED BY THE ASSESSEE READS AS UNDER : 1. THAT ORDER PASSED U/S 250(6) OF THE INCOME TAX ACT, 1961 BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-5, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO ARBITRARILY UPHOLD AN ADDITION OF RS. 5,87,189/- MADE BY THE LEARNED ASSESSING OFFICER BY APPLYING G.P. RATE OF 7.53% ON THE STOCK FOUND SHORT BY RS. 77,98,000/- WHICH AS PER THE APPELLANT HAD ACTUALLY BEEN MIS-APPROPRIATED BY M/S PBR AGRO INDUSTRIES, MEHAL KALAN. 2 3. THE CHALLENGE IN THE ABOVE GROUND IS AGAINST THE ADDITIO N CONFIRMED BY THE CIT(A) OF RS.5,87,189/-, MADE BY APPLYING GP RATE OF 7.53% ON THE STOCK FOUND SHORT BY RS.77,98,000/- DURING SEARCH CONDUCTED ON THE ASSESSEE . 4. BRIEF FACTS RELATING TO THE CASE ARE THAT THE ASS ESSEE IS ENGAGED IN MANUFACTURING OF RICE BRAN AND SUNFLOWER OIL AND DURING MANUFACTURING BY PRODUCTS ARE ALSO PRODUCED LIKE DOC, FATTY ACIDS ETC WHICH ARE SOLD SEPARATELY. A SEARCH U/S 132 OF THE ACT WAS CONDUCTED IN THIS CASE ON THE ASSESSEE O N 31.08.2016 AND INVENTORY OF STOCK WAS PREPARED AS PER WHICH THE VALUE OF STOCK CAM E TO RS. 38,06,83,592/-. AS AGAINST THIS, THE STOCK AS PER THE BOOKS, ON THE BASIS O F TRADING ACCOUNT PREPARED AS ON 31.08.2016, WAS RS. 38,84,82,000/-. THUS, THERE WAS D IFFERENCE AND THE STOCK PHYSICAL FOUND WAS SHORT BY RS. 77.98 LACS. THIS FINDING WAS CONF RONTED TO THE ASSESSEE AND IN REPLY, IT WAS SUBMITTED THAT THERE WAS LITIGATION WITH M/S. PBR AGRO INDUSTRIES REGARDING MIS-ALLOCATION OF DOC OF 600 TO 650 MT WHICH WAS STORE D IN THEIR PREMISES THE VALUE OF THE SAME WAS CALCULATED AT RS. 70-75 LACS TAKING THE RATES AS RS. 11,570/- PER TON. IN SUPPORT OF THIS CONTENTION, THE ASSESSEE SUBMITTED THAT A CIVIL SUIT AGAINST THE SAID CONCERN WAS FILED AND ALSO A MEMORANDUM OF UNDERSTANDING W AS DRAWN WHEREIN THERE IS MENTION OF LIABILITY OF RS. 70 LACS PAYABLE TO THE ASSESSEE. IT WAS FURTHER ARGUED THAT THE SAID PARTY HAD ISSUED A CHEQUE OF RS. 62 LACS, AT THE BACK OF WHICH THE FACT OF MISAPPROPRIATION OF DOC HAD BEEN ADMITTED. THE REPLY W AS CONSIDERED BY THE AO WHO OBSERVED THAT NO SUCH ENTRIES HAD BEEN MADE IN THE STOCK REGISTER/BOOKS OF ACCOUNTS OF THE ASSESSEE AND KEEPING IN VIEW THE ABOVE, THE AO CONSIDERED THE DIFFERENCE IN STOCK TO REPRESENT UNACCOUNTED TRANSACTIONS. THUS, THE AM OUNT OF RS. 77.98 LACS WAS CONSIDERED AS SALE MADE OUTSIDE THE BOOKS OF ACCOUNTS , FOR WHICH THE ASSESSEE COULD NOT BRING ON RECORD ANY CORROBORATIVE MATERIAL. ACCORDI NGLY, GROSS PROFIT RATE OF 7.53% WAS APPLIED ON THESE SALES AND AN ADDITION OF RS. 5,87,1 89/- WAS MADE TO THE TAXABLE INCOME OF THE ASSESSEE. 5. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD.CIT (A) WHO UPHELD THE ADDITION HOLDING AS UNDER: THE FACTS OF THE CASE, BASIS OF ADDITION MADE BY TH E AO AND THE ARGUMENTS OF THE AR DURING THE COURSE OF APPELLATE PROCEEDINGS HAVE BEE N CONSIDERED. THE AR HAS REITERATED THE ARGUMENT THAT THE ASSESSEE TOOK A GODOWN ON REN T AND THE STOCK WAS TRANSFERRED TO GODOWN OF M/S. PBR AGRO INDUSTRIES. IT IS SUBMITTED THAT STOCK OF VALUE APPROXIMATELY RS. 3 77.98 LACS HAD BEEN MISAPPROPRIATED BY THE SAID CON CERN AND IN CONSEQUENCE THE APPELLANT FILED CIVIL SUIT FOR RECOVERY OF AMOUNT D UE ON ACCOUNT OF SHORTAGE OF STOCK AND A MEMORANDUM OF UNDERSTANDING WAS EXECUTED BETWEEN THE PROMOTERS OF M/S. PBR AGRO INDUSTRIES WHEREIN THERE IS MENTION OF LIABILITY OF RS. 70 LACS PAYABLE TO THE APPELLANT. THE AR HAS ALSO FILED A COPY OF CHEQUE OF RS. 62 LACS I SSUED TO THE ASSESSEE IN THIS REGARD. ON THE BACKSIDE OF THIS CHEQUE, THE FOLLOWING NARRATIO N IS GIVEN:- THIS CHEQUE IS AGAINST THE USE OF RB-DCC APPROXIM ATELY 600 MT WHICH WAS STORED INSIDE THE PREMISES OF PBR AGRO. THE BALANCE AMOUNT WOULD BE DECIDED WHEN THE BALANCE DCC IS LIFTED FROM SITE. FOR PBR AGRO INDUSTRIES SD/- PARTNER/AUTH. SIGNATORY FROM THE ABOVE NARRATION, IT IS CLEAR THAT THE CHEQ UE HAS BEEN GIVEN AGAINST THE USE OF RB- DOC APPROXIMATELY 600 MT BY M/S. PBR AGRO INDUSTRIE S. IT IS ALSO MENTIONED THAT THE BALANCE AMOUNT WOULD BE DECIDED WHEN THE BALANCE DO C IS LIFTED FROM THE SITE. FROM THE ENDORSEMENT AT THE BACK OF CHEQUE, IT IS CLEAR THAT FOR ALL PRACTICAL PURPOSES, THE PAYMENT WAS RECEIVED IN LIEU OF STOCK AND THUS REPR ESENTS THE SALE CONSIDERATIONS RECEIVED BY THE ASSESSEE IN RESPECT OF STOCK OF THE ASSESSEE USED BY M/S PBR AGRO INDUSTRIES WHICH WAS STORED INSIDE THE PREMISES OF M/S. PBR AGRO IND USTRIES,. EVEN IF, IT IS CONSIDERED THAT IT WAS IN THE NATURE OF COMPENSATION FOR MISAPPROPRIAT ION OF STOCK OF THE ASSESSEE BY M/S. PBR AGRO INDUSTRIES THEN ALSO FOR ALL PRACTICAL PUR POSES, IT REPRESENTS SALES SINCE THE AMOUNT WAS RECEIVED AGAINST THE STOCK. THE AO HAS NOT ADDE D THE WHOLE OF THE AMOUNT BUT ONLY THE INCOME ELEMENT HAS BEEN BROUGHT TO TAX BY APPLY ING THE GP RATE. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION OF RS. 5,87,189/- IS FOUND SUSTAINABLE AND HENCE CONFIRMED. 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REITER ATED THE CONTENTION MADE BEFORE THE LOWER AUTHORITIES THAT THE SHORTAGE IN STOCK COULD NOT BE TREATED AS SALES MADE OUTSIDE THE BOOKS OF THE ASSESSEE, SINCE IT HAD BEEN DULY EXPLAINED BOTH DURING ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEEDI NG WITH NECESSARY EVIDENCES ,THAT THE SHORTAGE RELATED TO STOCK OF RBDOC WHICH HAD BE EN MISAPPROPRIATED BY M/S PBR AGRO INDUSTRIES FROM WHOM THE ASSESSEE HAD TAKEN A G ODOWN ON RENT FOR STORING THE STOCK. THAT THE ASSESSEE HAD FILED A CIVIL SUIT FOR RECOVERY OF AMOUNT DUE AND A MOU HAD ALSO BEEN EXECUTED WITH THE PROMOTERS OF M/S PBR A GRO INDUSTRIES WHO HAD ACCEPTED THEIR LIABILITY OF RS 70 LACS PAYABLE TO THE ASSESSEE AND HAD ALSO ISSUED A CHEQUE OF RS. 62 LACS IN PURSUANCE TO THE MOU MENTIONING THE AFORESAID FACT AT THE BACK OF THE CHEQUE. THEREFORE. LD. COUNSEL FOR THE ASSE SSEE PLEADED THAT HAVING DULY EXPLAINED AND PROVED THE SHORTAGE OF STOCK AS BEING ON ACCOUNT OF MISAPPROPRIATION BY M/S PBR AGRO INDUSTRIES, THERE WAS NO REASON AT ALL TO TREAT THE SAME AS SALES OUTSIDE THE BOOKS OF ACCOUNT. 7. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF THE L D. CIT(A) 4 8. WE HAVE HEARD BOTH THE PARTIES AND ALSO GONE THROUGH THE ORDER OF THE LD.CIT(A). WE FIND MERIT IN THE CONTENTION OF THE LD. CO UNSEL FOR THE ASSESSEE THAT IT HAD OFFERED A DULY SUBSTANTIATED EXPLANATION OF THE SHORTA GE OF STOCK BEING ON ACCOUNT OF MISAPPROPRIATION OF STOCK STORED BY IT IN THE GODOWN TAKEN ON RENT FROM M/S PBR AGRO INDUSTRIES .EVIDENCES IN THE FORM OF CIVIL SUIT INSTI TUTED BY THE ASSESSEE AGAINST M/S PBR AGRO INDUSTRIES, THE MOU WITH THE PROMOTERS OF PBR AGRO INDUSTRIES ACCEPTING THEIR LIABILITY TO PAY THE ASSESSEE RS. 70 LACS ON ACCOUNT O F THE MIS-APPROPRIATION AND THE PAYMENT BY CHEQUE OF RS. 62 LACS BY M/S PBR AGRO IND USTRIES TO THE ASSESSEE AS A CONSEQUENCE OF THE MOU WAS ALSO FILED. THE CHEQUE ALSO MENTION OF THE FACT OF PAYMENT BEING MADE ON ACCOUNT OF USER OF STOCK LYING WI TH M/S PBR AGRO. NONE OF THE AFORESAID FACTS/EVIDENCES HAVE BEEN REBUTTED BY THE REV ENUE NOR ANY INFIRMITY POINTED OUT IN THE SAME. IN FACT WE FIND THAT EVEN THE LD.CIT(A) HAS ACCEPTED THE EXPLANATION OF THE SHORT STOCK TO THE EXTENT OF IT BEING RELATED TO STOCK STORED BY THE ASSESSEE WITH M/S PBR AGRO ,BUT HAS REJECTED THE EXPLA NATION OF MISALLOCATION OF THE SAID STOCK BY M/S PBR AGRO. THE LD.CIT(A) HAS HELD THA T CONSIDERING THE FACT THAT THE ASSESSEE HAD RECEIVED PAYMENT FROM M/S PBR AGRO IN LI EU OF STOCK THE SAME IS IN THE NATURE OF SALE EVEN IF IT RELATES TO MISAPPROPRIATED STOCK. WE ARE UNABLE TO CONCUR WITH THE LD.CIT(A)S REASONING . HAVING ACCEPTED THE FACT OF STOCK FOUND SHORT WITH THE ASSESSEE BEING THAT S TORED BY IT WITH M/S PBR AGRO .BASIS THE EVIDENCES FILED BY THE ASSESSEE IN THIS REG ARD, WE SEE NO REASON TO DISBELIEVE , FOR NO APPARENT REASON ,THE FACTUM OF MISAPPROPRIATION OF STOCK BY M/S PBR AGRO WHEN THESE VERY SAME EVIDENCES CLEARLY BRING OUT THIS FACT. THE EVIDENCES HAVE TO BE READ IN ENTIRETY. THE INSTITUTION OF CIVIL SUIT BY THE ASSESSEE AGAINST M/S PBR AGRO FOR MISAPPROPRIATION, THE ACCEPTANCE OF LIABILITY BY M/S PBR AGRO IN THE MOU SIGNED WITH THE ASSESSEE AND THE ISSUANCE OF CHEQUE OF RS.62 LACS IN PART DISCHARGE OF THE LIABILITY, ALL SUBSTANTIATE THE FACT OF MISAPPROPRIATION OF STOCK BY M/S PBR AGRO AS CONTENDED BY THE ASSESSEE . THE LD. CIT (A)S REASONING FOR TREATING IT AS SALE TO M/S PBR AGRO, WE FIND, IS PATENTLY ABSURD. MERELY BECAUSE THE PAYMENT HAS BEE N RECEIVED IN LIEU OF STOCK, DOES NOT MAKE IT SALE CONSIDERATION. THERE IS A HUGE D IFFERENCE BETWEEN SALE CONSIDERATION AND COMPENSATION AND THE TWO CANNOT BE EQU ATED. AND THE ASSESSEEE HAVING PROVED WITH EVIDENCE THAT THE SHORTAGE I N STOCK WAS ON ACCOUNT OF 5 MISAPPROPRIATION BY M/S PBR AGRO INDUSTRIES AND THE RE VENUE NOT HAVING BROUGHT BEFORE US ANY EVIDENCE TO THE CONTRARY TO CONTROVERT THI S EXPLANATION OF THE ASSESSEE, THE PAYMENT CANNOT BE SAID TO BE ON ACCOUNT OF SALE .W E THEREFORE HOLD THE EXPLANATION OF THE ASSESSEE FOR THE SHORTAGE OF STOCK T O BE BONAFIDE AND DIRECT THE DELETION OF ADDITION MADE TO THE INCOME OF THE ASSESSEE OF RS. 5,87,189/-, BY TREATING THE SHORTAGE OF STOCK AS SALES OUTSIDE THE BOOKS AND AP PLYING GP RATE THEREON . 9. GROUND NO. 1 OF THE APPEAL IS ALLOWED. 10. GROUND NO. 2 OF THE APPEAL READS AS UNDER: 2. THAT HE WAS FURTHER NOT JUSTIFIED TO UPHOLD ACTION OF THE LEARNED ASSESSING OFFICER IN MAKING AN ADDITION OF RS. 9,06,522/- ON ACCOUNT OF CASH FOUND SHORT BY INVOKING THE PROVISIONS OF SECTION 68 AND ALSO HOLDING THAT THE SAME TO BE TAXED U/S 115BBE OF THE INCOME TAX ACT, 1961. 11. FACTS OF THE CASE IN BRIEF ARE THAT DURING THE SEAR CH, AS PER PHYSICAL INVENTORY CASH AMOUNT OF RS. 6,88,200/- WAS FOUND AS AGAINST THE CASH BALANCE OF RS. 19,94,722/- AS PER CASH BOOK. THE ASSESSEE WAS CONFRONTED WITH THIS DISCREPANCY AND ASKED TO EXPLAIN THE DIFFERENCE OF CASH FOUND SHORT BY RS. 13,06 ,522/-. IN REPLY, IT WAS SUBMITTED THAT THE CASH OF RS. 6 LACS WAS GIVEN TO SH. SHIV KUMAR , THE DIRECTOR OF THE ASSESSEE COMPANY FOR SAFE CUSTODY AND THE BALANCE DIFFERENCE WA S STATED TO BE DUE TO NON- PUNCHING OF CERTAIN ENTRIES/NON-UPDATING OF CASH BOOK ON T HE RELEVANT DATE. THE AO FURTHER MENTIONED THAT CASH OF ONLY RS. 4,15,000/- WA S FOUND FROM THE RESIDENTIAL PREMISES OF SH. SHIV KUMAR GOYAL AND WHEN CONFRONTED ABOU T THE SOURCE, IT WAS STATED THAT THE CASH OF RS. 4,00,000/- PERTAINS TO M/S. A. P. REFINERY PVT. LTD. AND BALANCE RS. 15,000/- WAS FOR HOUSEHOLD UTILIZATION. THE AO THUS GAVE A BENEFIT OF RS. 4,00,000/- AND OUT OF DIFFERENCE OF RS. 13,06,522/- STILL THERE WA S DIFFERENCE OF RS. 9,06,522/- FOR WHICH THE ASSESSEE COULD NOT PUT UP ANY DOCUMENTARY EVIDENCE ON RECORD. IT WAS OBSERVED THAT THE ASSESSEE COULD NOT FILE ANY EVIDENCE LIKE CASH ACCOUNT/IMPRESSED ACCOUNT/EXPENSES MADE BUT NOT PUNCHED IN THE SYSTEM AND THE INABILITY TO FURNISH THE SAID DETAILS CAST A DOUBT OVER THE FINANCIAL TRANSACTI ONS AND MAINTENANCE OF ACCOUNTS ESPECIALLY THE CASH BOOK WHICH REPRESENTS THE DAILY CASH S TATUS OF THE COMPANY. THUS, AN ADDITION OF RS. 9,06,522/-WAS MADE TO BE CHARGED TO TAX U/S 115BBE OF THE INCOME TAX ACT, 1961 AT SPECIAL RATES MENTIONED THEREIN. 6 12. LD.CIT(A) UPHELD THE ORDER OF THE AO HOLDING AS UNDER : THE FACTS OF THE CASE, BASIS OF ADDITION MADE BY T HE AO AND THE ARGUMENTS OF THE AR DURING THE COURSE OF APPELLATE PROCEEDINGS HAVE BEE N CONSIDERED. THE AR HAS SUBMITTED THAT THE ADDITION COULD NOT BE MADE U/S 68 OF THE I NCOME TAX ACT, 1961. REGARDING THE DISCREPANCY, IT IS REITERATED THAT SOME ENTRIES WER E TO BE PUNCHED IN THE CASHBOOK ON THE DATE OF SEARCH OWING TO WHICH THERE WAS A DIFFERENC E BETWEEN THE CASH AS PER THE CASHBOOK VIZ. A VIZ. CASH FOUND AND COUNTED ON THE DATE OF SEARCH. IT IS ALSO SUBMITTED THAT THE EXPENSES WERE INCURRED OUT OF CASH SHOWN I N THE BOOKS OF ACCOUNTS AND ACCORDINGLY AS PER THE AR, SUCH EXPENSES COULD NOT BE TERMED AS UNEXPLAINED EXPENDITURE. IT IS HOWEVER NOTED THAT THE DETAILS O F SUCH EXPENSES WHICH WERE ALLEGEDLY INCURRED OUT OF THE CASH HAVE NOT BEEN SUBMITTED BY THE AR EVEN DURING THE APPELLATE PROCEEDINGS NOR ANY 'BILLS/VOUCHERS SUPPORTING SUCH ARGUMENTS HAVE BEEN FILED BY THE AR. IT IS ALSO NOT BROUGHT ON RECORD, THE ENTRIES WHICH REMAINED TO BE PUNCHED IN THE CASHBOOK ON THE DATE OF SEARCH RESULTING INTO DIFFE RENCE IN THE CASH AS PER THE CASH BOOK AND THE CASH FOUND ON PHYSICAL COUNTING. IT IS ACCE PTED THAT THE CASH AS PER THE CASHBOOK WAS MORE THAN THE CASH FOUND PHYSICALLY AT THE TIME OF SEARCH AND THE DIFFERENCE WAS RS. 13,06,522/-. THIS INDICATES THAT CASH HAS BEEN TAKEN FROM THE PREMISES WITHOUT MAKING AN ENTRY IN THE CASHBOOK. ONLY AN AM OUNT OF RS. 4,00,000/- WAS FOUND AT THE RESIDENCE OF SH. SHIV KUMAR BUT THE BALANCE AMO UNT OF RS. 9,06,522/-STILL REMAINED UNACCOUNTED FOR. THIS AMOUNT COULD HAVE BEEN EITHER USED FOR PAYMENTS TOWARDS UNACCOUNTED EXPENSES OR UTILIZED TOWARDS INVESTMENT S WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. IN EITHER CASE, ADDITION IS REQUIRED TO BE MADE IN THE HANDS OF THE ASSESSEE AS DEEMED INCOME U/S 69 OR U/ S 69B/69C ETC. BECAUSE THE AR HAS NOT GIVEN THE DETAILS OF UTILIZATION OF THE CASH AM OUNT FOUND SHORT DURING THE COURSE OF SEARCH PROCEEDINGS. UNDER THE FACTS AND THE CIRCUMS TANCES OF THE CASE AND IN VIEW OF THE DISCUSSION ABOVE, THE ACTION OF THE AO IN CHARGING THE AMOUNT OF RS. 9,06,522/- U/S 115BBE AT THE SPECIAL RATES, IS FOUND SUSTAINABLE AS PER LAW AND HENCE CONFIRMED. 13. BEFORE US, LD. COUNSEL FOR THE ASSESSEE REITER ATED THE CONTENTION MADE BEFORE THE LOWER AUTHORITIES AND LD. DR RELIED ON THE ORDER OF THE CIT(A). 14. WE HAVE HEARD BOTH THE PARTIES. THE ISSUE BEFORE US RELATES TO ADDITION MADE TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF CASH FOUND SHORT W ITH THE ASSESSEE. CASH SHORT, AT THE MOST REPRESENTS EXPENSES / OUTGOINGS OUT OF CASH AVAILABLE WITH THE ASSESSEE NOT ACCOUNTED FOR IN THE BOOKS OF THE ASSESSEE . SUCH UNACCOUNTED EXPENSES ARE SOURCED FROM CASH AVAILABLE WITH THE ASSESEE. H OW THEREFORE CAN THEY BE TREATED OR DEEMED TO BE INCOME OF THE ASSESSEE U/S 69/69B/69 C OF THE ACT WHEN THE SAID SECTIONS DEEM INVESTMENTS/MONEY, THE SOURCE OF WHICH T HE ASSESSEE OFFERS NO EXPLANATION ABOUT, AS INCOME OF THE ASSESSEE . WE THEREFORE HOLD THAT THERE IS NO CASE FOR MAKING ANY ADD ITION ON ACCOUNT OF CASH FOUND SHORT WITH THE ASSESSEE AND THE ADDITION SO MADE OF RS.9,06,522/- IS DIRECTED TO BE DELETED. 15. GROUND NO. 2 OF THE APPEAL IS ALLOWED. 7 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 16/10/2020. SD/- SD/- ! ' # (SANJAY GARG) (ANNAPURNA GUPTA) /JUDICIAL MEMBER $ % /ACCOUNTANT MEMBER /DATED: 16/10/2020 AG % ( ) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' * / CIT 4. ' * ( )/ THE CIT(A) 5. +, , , -./,0 / DR, ITAT, CHANDIGARH 6. ,/ 1# / GUARD FILE