I.T.O.-4(3), Agra V. Sh. Rajeshwar Prasad Agarwal, Agra

ITA 394/AGR/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0578 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 9 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 20-06-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 13-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRI
• Keywords: Business income; Search and seizure; Document seized; Block assessment; Documents seized
• Section: 153A; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.394/AGRA/2012 ASSESSMENT YEAR: 2005-06 THE INCOME TAX OFFICER-4(3), VS. SH. RAJESHWAR PRA SAD AGARWAL AGRA. PROP. M/S VIJAY KUMAR ASHOK KUMAR NOORI GATE, AGRA (PAN: ACUPA 8887D ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : SHRI PANKAJ GARGH, ADVOCATE DATE OF HEARING : 20.06.2013 DATE OF PRONOUNCEMENT : 28.06.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 09.03.2012 PASSED BY THE LD. CIT(A)-I, AGRA FOR THE ASSESSMENT YEAR 2005-06. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LD. CIT(A), AGRA HAS ERRED IN LAW AND ON FA CTS IN REDUCING THE SALES FROM RS.15 CRORE TO RS.10,31,91, 850/- ESTIMATED BY THE A.O. IGNORING THE FACTS THAT THE AO ESTIMATED T HE TURNOVER OF THE ASSESSEE AFTER REJECTING THE BOOKS OF ACCOUNT U/S 1 45(3) OF THE INCOME TAX ACT, 1961. 2. THAT LD. CIT(A)-I, AGRA HAS ERRED IN LAW ON FACT S IN DELETING THE ADDITION OF RS.15 LAC MADE BY THE AO ON ACCOUNT OF UNDISCLOSED 2 ITA NO.394/AGRA/2012 A.Y. 2005-06 AND UNEXPLAINED CASH IGNORING THE FACTS OF THE ENTR IES MADE IN THE CASH BOOK AFTER SEARCH MAY NOT BE CONSIDERED AS PRO PER AND RELIABLE. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION UNDER SECTION 132(1) OF THE ACT WAS CARRIED OUT ON 22.07.2004. THE ASSESSEE ENGAGED IN WHOLESALE BUSINESS OF SUGAR AND KHANDSARI. DURING THE COURSE OF SEARCH, ANNEXURE B-20,A DIARY WAS FOUND FROM THE PR EMISES OF THE ASSESSEE. THE A.O. DID NOT ACCEPT THE ASSESSEES EXPLANATION THAT THE SAID DIARY, ANNEXURE B-20 PERTAINED TO LATE SHRI VIJAY KUMAR, S ON OF LATE SHRI RAM. THE SAID DIARY PERTAINED TO THE BUSINESS OF LATE S HRI VIJAY KUMAR WHO IS THE BROTHER OF THE ASSESSEE. AFTER DEATH OF ASSESSEES BROTHER THE DIARY WAS GIVEN TO THE ASSESSEE BY THE WIFE OF LATE SHRI VIJAY KUMA R FOR RECOVERY OF DEBTORS. THE A.O. NOTED THE DETAILS OF THE DIARY FOR THE PER IOD A.Y. 1999-2000 TO 2005-06 AT PAGE NOS. 2 AND 3 OF HIS ORDER. THE ENTR IES WERE PERTAINING TO DIFFERENT YEARS. PAGE NOS. 15, 17, 25 AND 26 OF DIA RY PERTAINS TO A.Y. 2005- 06 FOR RS.7,65,212/-. HOWEVER, THE TOTAL OF ALL THE YEARS WAS RS.37,44,451/-. ON THE BASIS OF ENTRIES IN THE DIARY, THE A.O. FOUN D THAT THE SALE DECLARED IN THE BOOKS OF ACCOUNT WAS NOT RELIABLE. THE A.O. REJ ECTED THE BOOKS OF ACCOUNT INVOKING SECTION 145(3) OF THE ACT. THE A.O . ESTIMATED THE SALE OF RS.15,00,00,000/- INSTEAD OF THE SALE OF RS.8,73,06 ,983/- DECLARED BY THE ASSESSEE. THE A.O. CALCULATED DIFFERENCE AMOUNT AS UNDISCLOSED SALE AT 3 ITA NO.394/AGRA/2012 A.Y. 2005-06 RS.6,26,93,017/- (RS.15,00,00,000-RS.8,73,06,983/-) . THE A.O. APPLIED PROFIT RATE OF 1.5% AND CALCULATED THE PROFIT ON UN DISCLOSED SALE OF RS.9,40,395/-. THE A.O. MADE THE ADDITION OF RS.9,4 0,395/- AS OUT OF THIS INCOME THE ASSESSEE DID NOT INCUR ANY EXPENDITURE. 4. THE CIT(A) PARTLY ALLOWED THE GROUND AS UNDER :- (CIT(A) PAGE NOS. 12 & 13) I HAVE CONSIDERED THE ABOVE ARGUMENTS AND ALSO FIN DINGS OF THE AO IN THE ASSESSMENT ORDER AND ALSO PERUSED THE SEIZED DOCUMENT B-20 & A-9 ON THE BASIS OF WHICH, THE A.O. HAS MADE ENHANCEMENT ON ESTIMATE BASIS IN THE SALES OF THE ASSESSEE(APPELLA NT). AS I HAVE ALREADY HELD THAT THE A.O. HAS CORRECTLY REJECTED T HE BOOKS OF ACCOUNT U/S 145(3) IN VIEW OF THE FACT THAT THE TRANSACTION RECORDED IN SEIZED DIARY MARKED AS B-20 WERE NOT FOUND RECORDED IN THE BOOKS OF ACCOUNT OF THE APPELLANT, THEREFORE, THE AO WAS REQ UIRED TO COMPLETE THE ASSESSMENT IN THE MANNER PROVIDED IN SECTION 14 4 OF THE ACT TO THE BEST OF HIS JUDGMENT. FOR HIS PURPOSE, WHILE ESTIMA TING THE INCOME OF THE APPELLANT, THE AO TOOK INTO CONSIDERATION THE T RANSACTION AMOUNTING TO RS.7,65,212/- FOUND RECORDED IN SEIZED DIARY B-20. HE HAS ALSO TAKEN INTO ACCOUNT THE AMOUNT OF SALES COM PUTED BY HIM AS RECORDED ON BACK OF PAGE NO.30 OF ANNEXURE A-9 OF R S.1,19,21,820/-, SIMILARLY HE HAS CONSIDERED THE SALE AMOUNT OF RS.3 1,97,835/- AS RECORDED ON THE BACK OF THE PAGE NO.35 OF ANNEXURE A-9. AFTER TAKING INTO CONSIDERATION THESE THREE FIGURES, THE AO ENHA NCED THE TURNOVER OF THE ASSESSEE (APPELLANT) FROM RS.8,73,06,983/- T O RS.15 CRORE WHICH IS IN EXCESS OF RS.6,26,93,017/- (RS.1500,00,000-RS .8,73,06,983/-) FROM THE DECLARED TURNOVER OF RS.8,73,06,983/-. IN THE ASSESSMENT ORDER, NO DETAILS OR ANY CALCULATION HAS BEEN GIVEN AS TO HOW THE AO HAS COMPUTED THE TOTAL TURNOVER OF RS.15CRORE TO AR RIVE AT THE UNACCOUNTED SALE OF RS.6,26,93,017/- WHEN UNACCOUNT ED TRANSACTION DISCOVERED BY HIM FROM SEIZED RECORDS WERE ONLY RS. 7,65,212/- AS PER ANNEXURE B-20 AND RS.1,51,19,655/- (RS.1,19,21,82 0 FROM THE BACK OF PAGE NO.30 + RS.31,97,835/- FROM THE BACK OF PAG E NO.35) AS PER ANNEXURE A-9 HAVE BEEN DISCUSSED IN THE ASSESSMENT ORDER. I HAVE 4 ITA NO.394/AGRA/2012 A.Y. 2005-06 ALSO GONE THROUGH THE SEIZED DIARY MARKED AS B-20 A ND SEIZED PAPERS IN ANNEXURE A-9 TO FIND OUT IF ANY EXCESS AMOUNT AR E RECORDED IN THESE DOCUMENTS PERTAINING TO THE YEAR UNDER CONSIDERATIO N, HOWEVER, NO EXTRA SALE AMOUNT HAS BEEN FOUND RECORDED OTHER THA N THE AMOUNT DISCUSSED ABOVE, IN THESE DOCUMENTS RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AS DISCUSSED BY THE AO IN THE A SSESSMENT ORDER. DURING THE COURSE OF HEARING ALSO, THE A.O. HAS BEE N ASKED TO EXPLAIN THE ESTIMATION OF EXCESS TURNOVER AS MADE IN THE AS SESSMENT ORDER. HOWEVER, THE AO COULD NOT EXPLAIN THE BASIS FOR ENH ANCEMENT OF THE EXCESS SALE TO THE EXTENT OF RS.15 CRORE AND HE SUB MITTED THAT HE RELY ON ASSESSMENT ORDER IN THIS REGARD AND ALSO DECISIO N OF THE FIRST APPELLATE AUTHORITY ON THE IDENTICAL ISSUE IN THE C ASE OF THE ASSESSEE FROM A.Y. 1999-2000 TO 2003-04. THE APPEAL ORDER FO R THESE FOUR YEARS HAVE BEING DECIDED BY ME VIDE ORDER DATED 30 .05.2011. WHILE DECIDING FOR THESE ASSESSMENT YEARS, I HAVE RESTRIC TED THE UNDISCLOSED SALES TO THE EXTENT OF THE FIGURES RECORDED IN THE SEIZED DOCUMENTS. ON THE BASIS OF MY EARLIER DECISION, THIS YEAR ALSO, I HOLD THAT THE UNACCOUNTED SALES OF THE ASSESSEE (APPELLANT) ARE T O BE RESTRICTED TO THE FIGURE FOUND RECORDED IN THE SEIZED DOCUMENT WH ICH ARE AS UNDER:- AS PER A-20 (PAGE 15,17,25,26) RS. 7,65,212/ - AS PER A-9 (BACK OF PAGE NO.30&35) RS.1,51,19 ,655/- RS.1,58,84,867/- MY ABOVE DECISION IS ALSO IN CONFORMITY WITH THE DE CISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. DR. RML MALHTORA (2010) 320 ITR 403(ALL) IN WHICH, IT HAS BEEN HELD THAT ONE COULD NOT FORGET THAT IT IS A SEARCH CASE IN WHICH A SEARCH PARTY IS SUPPOSED AND EXPECTED TO FIND OUT ALL THE INCRIMINA TING DOCUMENTS, MATERIAL AS ALSO UNDISCLOSED ASSETS. A SEARCH ASSES SMENT, MUCH LESS A BLOCK ASSESSMENT, THEREFORE, STANDS ON A FOOTING DI FFERENT THAN A NORMAL ASSESSMENT MUCH LESS AN ASSESSMENT BASED ON THE BEST JUDGMENT OF AN AO. CONSIDERING THE ABOVE PRINCIPLE, THE HONBLE ALLAHABAD HIGH COURT IN THE ABOVE CITED CASE HAS HE LD THAT WHILE ESTIMATING ANY UNACCOUNTED FORMULA ADOPTED BY THE A O WAS REJECTED BY THE HONBLE JURISDICTIONAL ALLAHABAD HIGH COURT. IN FACT, IN THE PRESENT APPEAL, THE AO HAS NOT EVEN DISCUSSED ANY F ORMULA FOR ESTIMATING THE TOTAL SALES OF RS.15 CRORE RESULTING INTO UNDISCLOSED SALES OF RS.6,26,93,017/- AS AGAINST THE TRANSACTIO NS OF SUCH 5 ITA NO.394/AGRA/2012 A.Y. 2005-06 UNDISCLOSED SALES OF ONLY RS.1,58,84,867/- FOUND RE CORDED IN THE SEIZED DOCUMENTS AS COMPUTED BY ME FROM ANNEXURE B- 20 AND ANNEXURE A-9 AS ABOVE. THEREFORE, CONSIDERING THE D ECISION OF JURISDICTIONAL HIGH COURT, I ALSO DECIDE THAT THE U NACCOUNTED SALE IN THE HAND OF THE ASSESSEE SHOULD BE RESTRICTED TO TH E EXTENT THAT HAS BEEN FOUND RECORDED IN THE SEIZED DOCUMENT. THEREFO RE, THE AO IS DIRECTED TO ADOPT THE UNACCOUNTED SALES OF THE ASSE SSEE (APPELLANT) AT RS.1,58,84,867/- AS AGAINST RS.6,26,93,017/- ESTIMA TED BY HIM IN THE ASSESSMENT ORDER AND HENCE, TOTAL SALES SHOULD BE T AKEN AT 10,31,91,850/- (RS.8,73,06,983/- AS DECLARED BY THE ASSESSEE + RS.1,58,84,867/- AS PER THE SEIZED DOCUMENTS) INSTE AD OF RS.15,00,00,000/- ESTIMATED BY THE AO. THEREFORE, G ROUND NO.4 IS PARTLY ALLOWED. 5. HOWEVER, THE CIT(A) CONFIRMED THE ACTION OF THE AO FOR REJECTING THE BOOKS OF ACCOUNT AFTER INVOKING SECTION 145(3) OF THE ACT . THE CIT(A) HAS ALSO CONFIRMED THE FINDING OF THE A.O. THAT THE SAID DIA RY BELONGED TO THE ASSESSEE. 6. WE HAVE HEARD LD. REPRESENTATIVES OF THE PARTIES AND RECORDS PERUSED. THE CIT(A) FOUND THAT THE AO HAS ENHANCED THE TURNOVER OF THE ASSESSEE FROM RS.8,73,06,983/- TO RS.15 CRORE WHICH IS EXCESSIVE. THE A.O. DID NOT GIVE ANY DETAILS OR ANY CALCULATION THAT HOW THE AO HAS COMP UTED THE TOTAL TURNOVER OF RS.15 CRORE. THE CIT(A) HAS ALSO NOTED THAT WHEN UN ACCOUNTED TRANSACTION DISCOVERED BY A.O. FROM SEIZED RECORDS WERE ONLY R S.7,65,212/- AS PER ANNEXURE B-20. THE CIT(A) FOUND THAT A.O. SHOULD NOT HAVE CA LCULATED EXTRA SALE AMOUNT THAN THE RECORD FOUND DURING THE COURSE OF SEARCH. THE CIT(A) HAS ALSO GIVEN OPPORTUNITY OF HEARING TO A.O. AND WHILE HEARING, T HE AO HAS BEEN ASKED TO 6 ITA NO.394/AGRA/2012 A.Y. 2005-06 EXPLAIN THE EXCESS TURNOVER FOUND IN THE ASSESSMENT ORDER. THE A.O. DID NOT EXPLAIN THE BASIS FOR ENHANCEMENT OF THE EXCESS SAL E TO THE EXTENT OF RS.15 CRORE AND HE SIMPLY RELIED ON ASSESSMENT ORDER. THE CIT(A ) RESTRICTED THE UNDISCLOSED SALES TO THE EXTENT OF THE FIGURES RECORDED IN THE SEIZED DOCUMENTS. THE CIT(A) FOLLOWED A JUDGMENT OF THE HONBLE ALLAHABAD HIGH C OURT IN THE CASE OF CIT VS. DR. RML MALHOTRA (2010) 320 ITR 403(ALL) AND HELD T HAT UNDISCLOSED SALES OF ONLY RS.1,58,84,867/-WHICH WERE FOUND RECORDED IN T HE SEIZED DOCUMENTS AS ANNEXURE B-20 AND ANNEXURE A-9. 7. THE LD. D.R. RELIED UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX-VII VS. CHETAN D AS LACHMAN DAS [2012] 25 TAXMANN.COM 227 (DELHI) WHEREIN IT HAS BEEN HELD TH AT THE A.O. CAN DRAW INFERENCE THAT THERE CAN BE A SIMILAR TRANSACTION T HROUGHOUT THE PERIOD OF SIX YEARS COVERED BY SECTION 153A. THE SAID JUDGMENT IS DISTI NGUISHABLE ON FACTS AS IN THE CASE UNDER CONSIDERATION THE A.O. HIMSELF HAS COMPU TED UNACCOUNTED SALE ON THE BASIS OF DOCUMENT FOUND AT THE TIME OF SEARCH. IT I S NOT THE CASE OF THE A.O. THAT SEIZED DOCUMENTS FOUND FOR A PARTICULAR PERIOD AND THERE IS MATERIAL ON RECORD THAT SIMILAR TRANSACTIONS THROUGHOUT PERIOD OF SIX YEARS . THE CIT(A) CALLED THE REMAND REPORT FROM THE A.O. AND ASKED THE A.O. TO JUSTIFY HOW HE HAS REACHED TO THE CONCLUSION IN ESTIMATING SALE OF RS.15 CRORE. THE I TAT SPECIAL BENCH IN THE CASE 7 ITA NO.394/AGRA/2012 A.Y. 2005-06 OF ALL CARGO GLOBAL LOGISTICS LTD. VS. JCIT 137 ITD 287 (MUM,) (SB) WHEREIN IT HAS BEEN HELD THAT IN SUCH CASES AND ADDITION IS IN COME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT MADE UNDER SECTION 153A WI LL BE MADE ON THE BASIS OF UNACCOUNTED MATERIAL WHICH IN THE CONTEXT OF THE RE LEVANT PROVISIONS, BOOKS OF ACCOUNT OTHER DOCUMENT, FOUND DURING THE COURSE OF SEARCH AND NOT PRODUCED IN THE ORGINAL ASSESSMENT, AND UNDISCLOSED INCOME OF PROPE RTY DISCOVERED DURING THE COURSE OF SEARCH. IN THE LIGHT OF THE SAID ORDER OF THE ITAT MUMBAI BENCH (SUPRA), WE FIND THAT THE CIT(A) HAS RIGHTLY DIRECTED THE A. O. TO ADOPT UNACCOUNTED SALES TO THE EXTENT OF RS.1,58,84,867/- AS AGAINST RS.6,26,9 3,017/- ESTIMATED BY THE A.O. THE FINDING OF THE CIT(A) IS BASED ON THE MATERIAL FOUND AT THE TIME OF SEARCH. THE ORDER OF THE CIT(A) IS IN CONSONANCE WITH THE ORDER OF ITAT, MUMBAI BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. JC IT (SUPRA) AND THE JUDGMENT OF HONBLE ALLAHABD JURISDICTIONAL HIGH COURT IN THE C ASE OF CIT VS. DR. RML MALHOTRA (SUPRA). IN THE LIGHT OF THESE FACTS, WE D O NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). THE ORDER OF THE CIT(A) IS CON FIRMED ON THE ISSUE. 8. THE BRIEF FACTS OF THE SECOND GROUND ARE THAT DU RING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT DURING THE COURS E OF SEARCH OPERATION THE AMOUNT OF CASH OF RS.19,35,300/- WAS FOUND FROM THE RESIDENCE OF THE ASSESSEE AND RS.16,750/- FOUND FROM THE BUSINESS PREMISES OF THE ASSESSEE. THE TOTAL CASH FOUND 8 ITA NO.394/AGRA/2012 A.Y. 2005-06 WAS RS.19,52,856/- WHEREAS CASH BALANCE WAS RS.4,52 ,050/- AS RECORDED BEING A CLOSING CASH BALANCE OF EARLIER YEAR AND IN THIS YE AR. THE A.O. NOTED THAT THE CASH BOOKS WAS NOT WRITTEN UP-TO-DATE, WHICH WERE FOUND DURING THE SEARCH AND SEIZURE OPERATION. THE A.O. DID NOT ACCEPT THE CASH BOOK P RODUCED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDING. AFTER DEDUCTING RS.4,52, 050/- FROM RS.19,52,050/-, THE A.O. MADE ADDITION OF RS.15,00,000/-. 9. THE CIT(A) DELETED THE ADDITION AS UNDER :- (CIT (A) PAGE NO.26) WITH THE EXAMINATION OF SEIZED RECORDS RELATING TO PURCHASE OF SUGAR AND SUCH EXTRA PURCHASE OF SUGAR AS RECORDED IN THE SATTI BAHI BUT NOT RECORDED IN STOCK REGISTER AND SUCH PURCHASE OF SUGAR NOT FOUND DURING SEARCH AND HENCE, SUBSTANTIATING THE CLAIM O F THE ASSESSEE (APPELLANT) OF BEING SOLD BEFORE SEARCH AND ALSO SU CH SALES ARE FOUND RECORDED IN HIS SALE REGISTER AND INCLUDED IN THE T OTAL SALE AMOUNT DISCLOSED BY HIM, RECEIPT OF CASH ON SUCH SALES AS RECORDED IN THE CASH BOOK ON 17.07.2004, 18.07.2004, 19.07.2004 CANNOT B E REJECTED. AFTER EXAMINATION OF THE CASH BOOK DURING STAGE, THE AO I N HIS LETTER DATED 06.02.2012 HAS NOT OBJECTED TO VARIOUS EXPENDITURE RECORDED IN THE CASH BOOK BUT HE HAS ONLY OBJECTED TO THE RECEIPT OF CAS H SHOWN IN THE CASH BOOK ON ACCOUNT OF CASH SALES AND IF THESE CASH SAL ES ARE FOUND ON EXAMINATION OF THE SEIZED DOCUMENT TO BE CORRECT AS DISCUSSED IN PREVIOUS SUB-PARA, THE CASH BALANCE GIVEN IN THE CA SH BOOK PRODUCED DURING THE ASSESSMENT PROCEEDING CAN VERY WELL BE T AKEN INTO ACCOUNT TO ANALYSE THE CASH FOUND DURING SEARCH. THE CASH BALA NCE WORKED OUT IN THE CASH BOOK PRODUCED DURING THE ASSESSMENT PROCEE DING AFTER TAKING INTO ACCOUNT THE RECORDING OF ABOVE CASH SALE, IS R S.19,52,856/- WHICH IS SUFFICIENT TO EXPLAIN THE TOTAL CASH OF RS.19,52,05 0/- FOUND DURING THE SEARCH AND SEIZURE OPERATION. THEREFORE, I FIND THA T THE ASSESSEE (APPELLANT) EXPLAINED SATISFACTORILY AVAILABILITY O F CASH WITH HIM DURING SEARCH TO THE EXTENT OF RS.19,52,050/- ON THE BASIS OF A CASH BOOK PREPARED BY HIM. THOUGH THIS CASH BOOK WAS PREPARED AFTER SEARCH, THE 9 ITA NO.394/AGRA/2012 A.Y. 2005-06 ENTRIES RELATING TO RECEIPT OF CASH HAVE BEEN SUBSE QUENTLY EXPLAINED AND ENTRIES OF RECORDING OF EXPENSES IN CASH BOOK HAVE NOT BEEN DOUBTED BY THE AO AND THEREFORE, IN MY CONSIDERED OPINION, NO ADDITION ON ACCOUNT OF UNEXPLAINED CASH ON THE BASIS OF THE CASH FOUND DURING THE SEARCH IS REQUIRED TO BE MADE IN THE HAND OF THE ASSESSEE (AP PELLANT). THEREFORE, I DELETE THE ADDITION OF RS.15,00,000/- MADE IN THE A SSESSMENT ORDER ON ACCOUNT OF UNDISCLOSED AND UNEXPLAINED CASH. ACCORD INGLY, GROUND NO.6 IS ALLOWED. 10. WE HAVE HEARD LD. REPRESENTATIVES OF THE PARTIE S AND RECORDS PERUSED. WE NOTICED THAT BEFORE DELETING THE ADDITION, THE CIT( A) HAS PROVIDED OPPORTUNITY TO THE A.O. AND THE A.O. HAS FURNISHED THE REMAND R EPORT. THE CIT(A) HAS CONSIDERED THE REMAND REPORT FILED BY THE A.O. AND ALSO CONSIDERED THE ASSESSEES SUBMISSIONS. THE CIT(A) NOTED CERTAIN SA LE RECORDED SUBSEQUENT TO DATE OF SEARCH IN THE STOCK REGISTER AND IN THE CAS H BOOK. THE CIT(A) HELD THAT THESE SALES CANNOT AFTER THEN THE BECAUSE THESE SAL ES INCLUDED IN DISCLOSED SALES OF THE ASSESSEE. THE CORRECTNESS OF THESE SALES AS RECORDED IN THE CASH BOOK PRODUCED BY THE ASSESSEE IS ALSO GETTING CORROBORAT ED BY THE FACT THAT THE PURCHASE OF SUGAR HAVE BEEN FOUND RECORDED IN SATTI BAHI DURING THE SEARCH. THE CIT(A) HAS ALSO EXAMINED THE STOCK POSITION AND FOU ND THAT 1027 PACKETS WERE SOLD WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUN T AT THE TIME OF SEARCH AND SUCH NON RECORDING CANNOT BE SAID TO BE DELIBERATE BECAUSE IT IS UNDISPUTED FACT THE BOOKS OF ACCOUNT OF THE ASSESSEE WAS INCOMPLETE ON THE DATE OF SEARCH AND NOT WRITTEN UP TO DATE. THE CIT(A) AFTER CONSIDERI NG THE DETAILS AND BOOKS OF 10 ITA NO.394/AGRA/2012 A.Y. 2005-06 ACCOUNT, A.O.S REMAND REPORT AND ASSESSEES EXPLAN ATION FOUND THAT THE TOTAL CASH AVAILABLE WITH THE ASSESSEE WAS SUFFICIENT. TH E CIT(A) FOUND THAT THERE WAS SUFFICIENT CASH BALANCE AVAILABLE WITH THE ASSE SSEE. THE CIT(A) NOTED THAT WITHOUT REASON THE CASH BOOK PRODUCED BY THE ASSESS EE HAS NOT BEEN ACCEPTED BY THE A.O. THE CIT(A) FOUND THAT THE CASH BALANCE WORKED OUT IN THE CASH BOOK PRODUCED DURING THE ASSESSMENT PROCEEDING AFTE R TAKING INTO ACCOUNT THE RECORDING OF ABOVE CASH SALE WAS RS.19,52,856/- WHI CH IS SUFFICIENT TO EXPLAIN THE TOTAL CASH OF RS.19,52,050/- FOUND DURING THE S EARCH AND SEIZURE OPERATION. IT IS ADMITTED FACT THAT BOOKS OF ACCOUNT WAS NOT F OUND UP-TO-DATE AT THE TIME OF SEARCH. HOWEVER, ON THE BASIS OF MATERIAL, WHICH WA S NOT IN DISPUTE THE CASH BOOK WAS PREPARED AND FOUND SUFFICIENT CASH BALANCE TO EXPLAIN THE CASH FOUND AT THE TIME OF SEARCH. THERE IS NOTHING WRONG ON TH E PART OF THE ASSESSEE IF THE BOOKS OF ACCOUNT IS PREPARED ON THE BASIS OF RECORD SUBSEQUENT TO THE SEARCH AND SAME IS PRODUCED AT THE TIME OF ASSESSMENT PROCEEDI NG. THE A.O. OUGHT TO HAVE CONSIDERED THE CASH BOOK PRODUCED AT THE TIME OF AS SESSMENT PROCEEDING IN THE CASE UNDER CONSIDERATION. THE A.O. WITHOUT MENTIONI NG REASON THE BOOKS OF ACCOUNT AND CASH BOOK PREPARED BY THE ASSESSEE ON T HE BASIS OF THE RECORD THOUGH SUBSEQUENT TO THE SEARCH HAS NOT BEEN ACCEPT ED. WE NOTICED THAT THE CIT(A) HAS RIGHTLY APPRECIATED THE FACTS OF THE ISS UE AND FOUND THAT THE ASSESSEE WAS HAVING SUFFICIENT CASH BALANCE TO EXPLAIN THE C ASH FOUND AT THE TIME OF 11 ITA NO.394/AGRA/2012 A.Y. 2005-06 SEARCH. IT IS RELEVANT TO STATE THAT NEITHER BEFORE THE CIT(A) NOR BEFORE US THE REVENUE HAS POINTED OUT ANY SPECIFIC ENTRY OR TRANS ACTION WHICH WERE WRONGLY RECORDED IN THE BOOKS OF ACCOUNT AND CASH BOOK PREP ARED AFTER THE SEARCH. AS STATED ABOVE THAT IF THE CASH BOOK IS PREPARED SUBS EQUENT TO THE SEARCH ON THE BASIS OF RECORD OF THE ASSESSEES BUSINESS, SUCH CA SH BALANCE SHOWN IN THE BOOKS ARE ACCEPTABLE UNLESS CONTRARY MATERIAL AS POINTED OUT BY THE REVENUE AUTHORITIES. SINCE IN THE CASE UNDER CONSIDERATION, THE REVENUE HAS FAILED TO POINT OUT ANY CONTRARY MATERIAL, IN THE LIGHT OF TH ESE FACTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). THE ORDER OF THE CIT(A) IS CONFIRMED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER AMIT/- COPY OF THE ORDER FORWARDED TO:- APPELLANT/RESPONDENT/CIT (APPEALS) CONCERNED/CIT CO NCERNED D.R., ITAT, AGRA BENCH, AGRA/GUARD FILE. BY O RDER SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, AGRA TRUE COPY