Smt. Kundan Singh, New Delhi V. ACIT, New Delhi

ITA 2062/DEL/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6821 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 09-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Tax effect; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBE R & SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 2062/DEL/2015 ASSESSMENT YEAR: 2012-13 SMT. KUNDAN SINGH C-6&7/6529, VASANT KUNJ, NEW DELHI. PAN NO. AAXPS1361F VS ACIT CENTRAL CIRCLE 25, NEW DELHI. APPELLANT RESPONDENT ASSESSEE BY SH. GAUTAM JAIN, ADV. SH. PIYUSH KAMAL, ADV. SH. LALIT MOHAN, CA REVENUE BY SH. J.K. MISHRA, CIT DR ORDER PER SHRI BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-23, NEW DELHI DATED 31.01.2015 FOR AY 2012- 13. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. DATE OF HEARING 10.04.2019 DATE OF PRONOUNCEMENT 29.04.2019 2 ITA NO. 2062/DEL /2015 3. LD. COUNSEL FOR ASSESSEE DID NOT PRESS GROUND NO . 2 OF THE APPEAL, CHALLENGING THE ADDITION OF RS. 3,28,175/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY. THIS GROUND O F APPEAL OF ASSESSEE IS, ACCORDINGLY, DISMISSED AS NOT PRESSED. 4. ON GROUND NO. 1, ASSESSEE CHALLENGED THE ADDITIO N OF RS. 7,58,400/- ON ACCOUNT OF CASH FOUND DURING THE COUR SE OF SEARCH. 5. THE AO NOTED IN THE ASSESSMENT ORDER THAT DURING THE COURSE OF SEARCH CASH AMOUNTING TO RS. 42,58,400/- WAS FOU ND OUT OF WHICH RS. 39 LAKHS HAS BEEN SEIZED. THE EXPLANATIO N OF ASSESSEE WAS CALLED FOR TO EXPLAIN THE CASH. THE ASSESSEE S UBMITTED BEFORE THE AO THAT SHE IS PROPRIETOR OF M/S GENERATION NEX T COMPUTER MART. THE FIRM IS ENGAGED IN TRADING OF COMPUTERS, ACCESSORIES AND PARTS. THE FIRM IS HAVING OFFICE AT B-1A, BHAG WATI TOWER, 39, COMMUNITY CENTRE, WAZIRPUR INDUSTRIAL AREA, DELHI. THE FIRM WAS MAINTAINING CASH BALANCE IN EXCESS OF RS. 31 LAKHS DURING THE YEAR. THE BALANCE CASH WAS RETAINED BY ASSESSEE AT HOME WHICH WAS FOUND DURING THE COURSE OF SEARCH. SUMMARY OF THE CASH BOOK WAS FILED. COMPLETE CASH BOOK WAS PRODUCED FOR VER IFICATION. IT WAS ALSO SUBMITTED THAT ASSESSEE IS ALSO PARTNER IN FIRM M/S PINNACLE FASHIONS INCORPORATED ON 18.07.2006. THE FIRM IS ENGAGED IN JOB WORK OF COMPUTERIZED EMBROIDERY. TH E FIRM WAS MAINTAINING CASH BALANCE IN EXCESS OF RS. 12 LAKHS DURING THE YEAR WHICH WAS KEPT AT HOME OF THE ASSESSEE WHICH WAS FO UND DURING THE COURSE OF SEARCH. COPY OF THE BALANCE SHEET, P ROFIT AND LOSS ACCOUNT AND ITR WERE FILED IN SUPPORT OF THE SAME. THE AO, 3 ITA NO. 2062/DEL /2015 HOWEVER, DID NOT ACCEPT THE EXPLANATION OF THE ASSE SSEE AND TREATED THE ENTIRE CASH AS UNEXPLAINED AND MADE THE ADDITION OF RS. 42,58,400/-. 6. THE ADDITION WAS CHALLENGED BEFORE LD.CIT(A). T HE LD. CIT(A) ACCEPTED THAT RS. 35 LAKHS BELONG TO THE PROPRIETOR SHIP CONCERN OF THE ASSESSEE AND TO THAT EXTENT BENEFIT WAS ALLOWED TO THE ASSESSEE AND ADDITION TO THAT EXTENT WAS DELETED. HOWEVER, AS REGARDS, THE BALANCE CASH OF RS. 7,58,400/- BELONGS TO THE PARTN ERSHIP FIRM, LD. CIT(A) NOTED THAT BOOKS OF ACCOUNTS ARE NOT AVAILAB LE, THEREFORE, ADDITION WAS CONFIRMED. LD. COUNSEL FOR ASSESSEE S UBMITTED THAT DEPARTMENTAL APPEAL HAS BEEN DISMISSED BY ITAT ON A CCOUNT OF LOW TAX EFFECT. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT ADDITION IS WHOLLY UNJUSTIFIED. THE ASSESSEE HAS FILED COPY OF THE BALANCE SHEET OF THE PARTNERSHIP FIRM AT PAGE 3 5 OF THE PAPER BOOK IN WHICH THE CASH IN HAND HAVE BEEN SHOWN AT R S. 12,21,167/-. THE ASSESSEE IS A PARTNER IN THIS FIR M. THE LD.CIT(A) NOTED THAT ASSESSEE HAS NOT WITHDRAWN ANY AMOUNT FR OM THE PARTNERSHIP FIRM. THIS REASON IS NOT SUFFICIENT TO REJECT THE EXPLANATION OF THE ASSESSEE. THE ASSESSEE HAS EXPL AINED THAT AS A PARTNER IN PARTNERSHIP FIRM, SHE KEPT THE CASH IN H AND OF MORE THAN 12 LAKHS AT HOUSE, WHICH WAS FOUND DURING THE COURSE OF SEARCH. THEREFORE, EXPLANATION OF ASSESSEE IS SUPP ORTED BY THE BALANCE SHEET WHICH WAS FILED WITH THE REVENUE DEPA RTMENT ALONG WITH THE RETURN OF INCOME. THEREFORE, EXPLANATION OF ASSESSEE 4 ITA NO. 2062/DEL /2015 CANNOT BE REJECTED BY THE AUTHORITIES BELOW. THE A SSESSEE HAS THUS, EXPLAINED BALANCE CASH FOUND DURING THE COURS E OF SEARCH. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIE S BELOW AND DELETE THE ADDITION OF RS. 7,58,400/-. GROUND NO. 1 OF APPEAL OF ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.04.2019 SD/- SD/- (PRASHANT MAHARISHI) (BHAVNESH S AINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: .04.2019 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI