Sh. Omprakash Garg, New Delhi V. DCIT, New Delhi

ITA 5576/DEL/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7065 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 14-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: CHARU GOE L
• Keywords: Search and seizure; Document seized; Documents seized; Set aside
• Section: 234B; 132; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E, NEW DELHI BEFORE SH. R.K PANDA, ACCOUNTANT MEMBER AND SH. KULDIP SINGH, JUDICIAL MEMBER ITA NO.5576/DEL/2014 ASSESSMENT YEAR: 2011-12 OM PRAKASH GARG 85, BHARAT NAGAR, NEW FRIENDS COLONY, NEW DELHI PAN NO. AENPG2904C VS DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -11, ARA CENTRE, JHANDEWALAN, NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. CHAR U GOEL, CA RESPONDENT BY SH. RINKU SINGH, SR. DR DATE OF HEARING: 09/04/2019 DATE OF PRONOUNCEMENT: 30/04/2019 ORDER PER R.K. PANDA, AM: 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER DATED 31.07.2014 OF THE CIT(A)-31, NEW DELHI RELATI NG TO A. Y. 2011- 12. 2. THE FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESS EE IS AN INDIVIDUAL. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT AC T WAS CONDUCTED AT THE BUSINESS PREMISES OF M/S. OVERSEAS CARPETS L IMITED AS WELL AS THE RESIDENTIAL PREMISES OF DIRECTORS ON 06.01.2011 ALONGWITH SHIV VANI GROUP OF CASES. THE ASSESSEE FILED HIS RETURN OF INCOME ITA NO.5576/DEL/2014 2 DECLARING TOTAL INCOME AT RS.84,97,069/-THE ASSESSI NG OFFICER ISSUED STATUTORY NOTICES TO WHICH THE ASSESSEE REPLIED. 3. THE ASSESSING OFFICER DURING THE COURSE OF ASSES SMENT PROCEEDINGS OBSERVED THAT ASSESSEE WAS ASKED TO GIV E AN EXPLANATION IN RESPECT OF INCOME DECLARED U/S 132 (4) AMOUNTING TO RS.75 LACS. HOWEVER, THE ASSESSEE DID NOT FURNISH ANY EXPLANATI ON / DETAILS OF INCOME DECLARED U/S. 132 (4) OF THE ACT AMOUNTING T O RS.75 LACS. HE OBSERVED THAT THE ABOVE INCOME HAS NOT BEEN SURREND ERED BY THE ASSESSEE VOLUNTARILY BUT ONLY AFTER BEING ASKED TO EXPLAIN THE TRANSACTION APPEARING IN THE DOCUMENTS FOUND AND SE IZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION ON 06.01.201 1 AT THE BUSINESS PREMISES AND RESIDENTIAL PREMISES OF THE ASSESSEE. HE, THEREFORE, TREATED THE INCOME OF RS.75 LACS AS INCOME FROM UND ISCLOSED OR UNEXPLAINED SOURCE DURING THE YEAR. 4. HE NOTED THAT DURING THE COURSE OF SEARCH OPERAT ION CASH AMOUNTING TO RS.13,87,700/- WAS FOUND FROM THE RESI DENTIAL PREMISES ON 06.01.2011 OUT OF WHICH CASH AMOUNTING RS.11 LAK H WAS SEIZED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASS ESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE ABO VE CASH ALONGWITH DOCUMENTARY EVIDENCE. IN ABSENCE OF ANY DETAILS AN D EVIDENCE GIVEN BY THE ASSESSEE THE ASSESSING OFFICER HELD THE ABOV E CASH OF RS.13,87,000/- AS UNEXPLAINED CASH DURING THE YEAR. HE, THEREFORE, MADE ADDITION OF RS.13,87,000/- TO THE TOTAL INCOME OF THE ASSESSEE. 5. THE ASSESSING OFFICER SIMILARLY MADE ADDITION OF RS.14,96,000/- ON ACCOUNT OF UNEXPLAINED CASH PAYMENT WHICH WAS DE LETED BY THE ITA NO.5576/DEL/2014 3 CIT(A) AND THE REVENUE IS NOT IN APPEAL, THEREFORE, WE ARE NOT CONCERNED WITH THE SAME. 6. BEFORE LD. CIT(A) ASSESSEE SUBMITTED THAT COMPLE TE EXPLANATION / SUBMISSION WAS GIVEN TO THE ASSESSING OFFICER REG ARDING THE CASH FOUND DURING THE SEARCH. THE COPY OF THE SUBMISSIO N MADE ALONGWITH COPIES OF THE ABSTRACTED CASH BOOK OF THE ENTITIES WAS FILED BEFORE THE CIT(A). IT WAS FURTHER ARGUED THAT THE ASSESSEE HA S DECLARED AN AMOUNT OF RS.75 LAKH IN THE FINANCIAL YEAR 2010-11 RELEVANT TO A. Y. 2011-12 WHICH COVERS THE ABOVE DISCREPANCIES. 7. HOWEVER, THE CIT(A) WAS NOT FULLY SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESEE. HE OBSERVED THAT ASSESSEE HAD DULY SUBMITTED AN EXPLANATION DURING THE ASSESSMENT PROC EEDINGS WHICH HAS BEEN COMPLETELY IGNORED BY THE ASSESSING OFFICE R. ON THE BASIS OF THE VARIOUS ARGUMENTS ADVANCED BY THE ASSESSEE, THE LD. CIT (A) CALLED FOR THE ASSESSMENT FOLDERS AND EXAMINED IT A ND NOTED THAT THE ASSESSEE IN RESPONSE TO THE QUERRY RAISED BY THE AS SESSING OFFICER HAS SUBMITTED THE EXPLANATION WHICH IS AVAILABLE IN THE ASSESSMENT FOLDER AND IN THE ORDER SHEET ENTRY. INSPITE OF THE ABOVE REPLIES/ EXPLANATION SUBMITTED BY THE ASESSEE THE ASSESSING OFFICER MENT IONED THAT THE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION REGARDIN G THE SOURCE OF THE ABOVE CASH. HE, THEREFORE, HELD THAT THE ASSE SSING OFFICER HAS NOT APPLIED HIS MIND ON THIS ISSUE PROPERLY. HOWEV ER, HE NOTED THAT THE ASSESSEE WITHDREW CASH FROM HIS DIFFERENT CONCE RNS, THE TOTAL SUM OF WHICH WAS APPROXIMATELY THE SAME AS FOUND DURING THE SEARCH. HOWEVER, IT WAS EXPLANATION OF THE ASSESSEE THAT TH E EXCESS CASH IS ON ACCOUNT OF VOUCHERS PENDING AS ON THE DATE OF SEARC H. HE OBSERVED THAT THE COPIES OF THE CASH BOOK FURNISHED BY THE A SSESSEE SHOW CASH BALANCES IN THE BOOKS OF THE CONCERNS WHEREIN ASSES SEE HAS INTEREST BUT IT DOES NOT SHOW THAT ASSESSEE HAS WITHDREW CAS H. FURTHER IF THE ITA NO.5576/DEL/2014 4 VOUCHERS ARE PENDING THAT WOULD MEAN EXPENDITURE HA S ALREADY BEEN INCURRED AND THEREFORE, THE ASSESSEE SHOULD NOT HAV E BEEN LEFT WITH CASH. ON THE DAY OF SEARCH WHEN THE ASSESSEE WAS CA LLED UPON TO EXPLAIN THE CASH AVAILABLE AT HIS RESIDENCE, THE AS SESSEE HAS EXPLAINED THAT PART OF THE CASH BELONGS TO THE FOLL OWING THREE ENTITIES AND REMAINING PART BELONGING TO THE MEMBERS OF THE FAMILY. 1. M/S. OVERSEAS CARPETS LTD. 2. M/S. OVERSEAS EXPORTERS 3. M/S. OVERSEAS TREADING CORPORATION 8. HE FURTHER NOTED THAT ASSESSEE HAD EXPLAINED THA T THE CASH WAS EXPLAINABLE WITH REFERENCE TO WITHDRAWALS FROM THE BANKS THUS THE ASSESSEE CHANGING HIS STAND. REJECTING THE VARIOUS EXPLANATION GIVEN BY THE ASSESSEE, THE CIT(A) UPHELD THE ACTION OF TH E ASSESSING OFFICER BUT ON DIFFERENT REASONINGS. 9. AGGRIEVED WITH SUCH ORDER OF THE CIT(A), THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING FOLLOWING GROUNDS OF APPEAL :- 1) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS E RRED IN LAW AND ON FACTS IN SUSTAINING THE ADDITION MADE OF RS. 13,87,0 00/- BEING CASH FOUND DURING SEARCH CONDUCTED AT RESIDENTIAL / BUSINESS P REMISES OF THE APPELLANT. 2) THE LD COMMISSIONER OF INCOME TAX (APPEALS) GROSSL Y ERRED IN NOT APPRECIATING THE FACT THAT THE COMPLETE DETAILS OF A VAILABLE CASH IN HAND OF VARIOUS ENTITIES ALONGWITH ABSTRACT OF CASH BOOK ON THE DAY OF SEARCH WAS SUBMITTED DURING THE ASSESSMENT AS WELL AS DURING FIR ST APPELLANT PROCEEDINGS AND HENCE ADDITION IN QUESTION IS WHOLLY ILLEGAL. 3) THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING THE LD. ITA NO.5576/DEL/2014 5 AO'S ACTION OF MAKING ADDITION EVEN AFTER ACCEPTING THAT THE LD. AO WENT ON MECHANICALLY FOR MAKING ADDITION OF CASH FOUND D URING THE SEARCH. 4) THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER THE ADDITION MADE BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS FACTUAL LY INCORRECT, ILLEGAL, WITHOUT JURISDICTION, VOID-AB-INITIO AND THE SAME HA S BEEN MADE AFTER RECORDING INCORRECT FACTS AND FINDINGS. 5) IN ANY VIEW, AND WITHOUT PREJUDICE TO THE ABOVE GRO UNDS, ADDITIONS MADE, INTEREST CHARGED U/S 234A & 234B AND THE ASSESSMENT O RDER PASSED ARE WRONG, ILLEGAL, WITHOUT PROPER OPPORTUNITY, BAD IN L AW AND AGAINST THE FACTS AND LAW OF THE CASE. 6) THE ASSESSEE COMPANY CRAVES LEAVE TO ADD, AMEND, A LTER OR FORGO ANY OF THE GROUNDS AT THE TIME OF OR BEFORE THE HEARING. 10. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY OBJEC TED TO THE FINDINGS GIVEN BY THE CIT(A). SHE SUBMITTED THAT TH E CASH FOUND AT THE RESIDENTIAL PREMISES IS FROM THE BUSINESS OF THE AS SESEE GROUP AND EXPLAINABLE FROM THE RECORDED BOOKS OF ACCOUNTS AND NONE OF HIS SUBMISSIONS AND CLAIMS HAVE BEEN SHOWN TO BE INCORR ECT. SHE SUBMITTED THAT THE CASH IN HAND AS ON THE DATE OF S EARCH IN THE BOOKS OF ACCOUNTS OF THE FOUR FIRMS AND ONE COMPANY OPERA TING FROM THE GROUND FLOOR OF THE PREMISES SEARCHES AS UNDER :- S. NO. FIRM NAME AMOUNT (RS.) 1. OVERSEAS TRADING CORPORATION 5,90,168 2. OVERSEAS CARPETS LIMITED 3,15,948 3. OVERSEAS EXPORTERS 2,67,862 4. OVERSEAS BEAUTY ART FURNITURE EXPORTS P. LTD 1,74,871 5. TRAVEL OVERSEAS INDIA LIMITED 1,15,663 ITA NO.5576/DEL/2014 6 TOTAL 14,64,512/- 11. THE CASH BOOK ABSTRACTS OF ALL THE FIVE CONCERN S CLEARLY SHOW THAT THE CLOSING CASH BALANCE AS ON THE DATE OF SEA RCH ALMOST TALLIES WITH THE CASH FOUND. WITHOUT PREJUDICE TO THE ABOVE SHE SUBMITTED THAT ASSESSEE HAS DECLARED ADDITIONAL INCOME OF RS. 75 LACS TO COVER ANY POSSIBLE DISCREPANCIES. THEREFORE, THE ABOVE A MOUNT WILL BE COVERED UNDER THE AMOUNT SURRENDERED IN THE STATEME NT RECORDED U/S 132 (4) DURING THE COURSE OF SEARCH. SHE FURTHER S UBMITTED THAT CERTAIN VOUCHERS WERE PENDING FOR APPROVAL FOR WHIC H THE CASH WAS NOT PAID. THE LD. CIT(A) HAS DISBELIEVED THE SAME O N THE GROUND THAT EXPENDITURE HAS ALREADY BEEN INCURRED IF VOUCHERS A RE PENDING AND THEREFORE, THE ASSESSEE SHOULD NOT HAVE BEEN LEFT W ITH CASH. SHE SUBMITTED THAT THE ASSESSING OFFICER HAS GIVEN A WR ONG FACTUAL FINDING THAT ASSESSEE HAS NOT FURNISHED ANY DETAILS WHEREAS THE ASSESSEE HAS FILED REQUISITE DETAILS SUBSTANTIATING THE CASH FOU ND DURING THE COURSE OF SEARCH. ALTHOUGH THE LD. CIT(A) HAD APPRECIATED THE FACT THAT THE ASSESSEE HAS SUBMITTED THE REQUISITE DETAILS HOWEVE R HE WENT IN THE WRONG DIRECTION AND UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER WHICH IS NOT CORRECT UNDER THE FACTS AND CI RCUMSTANCES OF THE CASE. 12. REFERRING TO THE DECISION OF THE COORDINATE BEN CH OF THE TRIBUNAL IN THE CASE OF BHAGIRATH AGGARWAL VS. ACIT ITA NO.2 516/DEL/2013 VIDE ORDER DATED 09.01.2015 SHE DREW THE ATTENTION OF THE BENCH TO THE FOLLOWING OBSERVATIONS :- WITH REGARD TO THE CASH FOUND, HE SUBMITTED THAT CA SH BELONGS TO THE BUSINESS CONCERN. LEARNED CIT (APPEALS) HAS REJECTED THE CONTENTION OF ASSESSEE ON THE GROUND THAT BUSINESS CASH CANNOT BE ITA NO.5576/DEL/2014 7 FOUND AT THE RESIDENCE. THE BUSINESS CONCERNS ARE OW NED BY THE FAMILY MEMBERS. THE SEARCH WARRANT WAS ISSUED FOR T HE RESIDENCE IN THE NAME OF INDIVIDUALS AS WELL AS THREE BUSINESS C ONCERNS. THEREFORE, POSSIBILITY OF CASH BELONGING TO THE BUS INESS CONCERN, AVAILABLE AT THE RESIDENCE CANNOT BE RULED OUT. THE CASH FOUND AT THE RESIDENCE WAS NOT MORE THAN RECORDED IN THE BOOKS O F BUSINESS CONCERNS. NO ADDITION OUGHT TO HAVE BEEN CONFIRMED BY THE LEARNED CIT (APPEALS). 13. SHE ACCORDINGLY SUBMITTED THAT THE ADDITION SUS TAINED BY THE CIT(A) SHOULD BE DELETED. 14. THE LD. DR ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). SHE SUBMITTED THAT DESPITE OPPORTUNITIES G RANTED BY THE ASSESSING OFFICER AND THE CIT(A) THE ASSESSEE HAS N OT EXPLAINED PROPERLY, REGARDING THE CASH FOUND DURING THE COURS E OF SEARCH. THE ASSESSEE IN HIS STATEMENT RECORDED U/S.132 (4) HAS NOT GIVEN THE BIFURCATION OF THE AMOUNTS OF RS. 75 LACS SURRENDER ED. FURTHER THE STATEMENT OF THE ASSESSEE THAT VOUCHERS ARE PENDING AND THEREFORE, THE CASH IS AVAILABLE WITH THE ASSESSEE CANNOT BE A CCEPTED BECAUSE THE CASH MUST HAVE BEEN ALREADY SPENT. SHE ACCORDI NGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE UPHELD. SHE ALSO R ELIED ON THE FOLLOWING DECISIONS AS PER HER WRITTEN SYNOPSIS WHI CH ARE AS UNDER :- 1. SUDHIR KUMAR SHARMA (HUF) VS. CIT [2016] 69 TAXM ANN.COM 219 (SC) / [2016] 239 TAXMAN 264 (SC) 2. SUDHIR KUMAR SHARMA (HUF) VS. CIT [2014] 46 TAXM ANN.COM 340 (PUNJAB & HARYANA )/ [2014] 224 TAXMAN 178 (PUN JAB & HARYANA ) (MAG.) 3. KAVITA CHANDRA VS. CIT [2017] 81 TAXMANN.COM 317 (PUNJAB & HARYANA )/[2017] 248 TAXMAN 358 (PUNJAB & HARYANA ) ITA NO.5576/DEL/2014 8 4. KRISHAN KUMAR SETHI VS. CIT [2018] 92 TAXMANN.CO M 324 (DELHI) 5. CIT VS. DK GARG [2017] 84 TAXMANN.COM 257 (DELHI ) 6. CIT VS. VIJAY AGRICULTURAL INDUSTRIES [2007] 294 ITR 610 (ALLAHABAD) 7. BHAIYALAL SHYAM BEHARI VS. CIT [2005] 276 ITR 38 (ALLAHABAD) /[2006] 202 CTR 515 (ALLAHABAD) 15. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. W E HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. W E FIND THE ASSESSING OFFICER MADE ADDITION OF RS.13,87,700/- B EING THE CASH FOUND FROM RESIDENTIAL PREMISES OF THE ASSESSEE ON THE GROUND THAT ASSESSEE COULD NOT EXPLAIN THE SOURCE OF THE ABOVE CASH ALONGWITH DOCUMENTARY EVIDENCE. WE FIND THE LD. CIT (A) HAS G IVEN A FINDING THAT ASSESSEE HAD SUBMITTED THE DETAILED EXPLANATIO N REGARDING THE CASH FOUND BUT ASSESSING OFFICER HAS NOT APPLIED HI S MIND PROPERLY. HOWEVER, THE LD. CIT (A) SUSTAINED THE ADDITION MAD E BY THE ASSESSING OFFICER ON A DIFFERENT REASONING ON THE G ROUND THAT THE ASSESSEE HAS TRIED TO BRING ON RECORD POSSIBLE EXPL ANATIONS WITHOUT PINPOINTING WHAT WERE THE GROUND FACTS IN HIS CASE. FOR THE SAKE OF CLARITY WE REPRODUCE THE FINDINGS OF THE CIT(A) WHI CH READS AS UNDER :- 4.1 I HAVE CONSIDERED THE SUBMISSIONS OF THE AR. TH E FIRST ADDITION OF RS. 13,87,000/- RELATES TO UNEXPLAINED CASH FOUND AT THE RESIDENTIAL PREMISES OF THE ASSESSEE. THE AO HAS MADE THE ADDITION ON TH E GROUND THAT THE ASSESSEE HAS NOT FURNISHED ANY EXPL ANATION REGARDING THE SOURCES OF THE ABOVE CASH. AR HAS, HOWEVER, SUBMITTED DURING THE APPEAL PROCEEDINGS TH AT THE SAID REMARKS OF THE AO ARE FACTUAL INCORRECT . THE ASSESSEE HAD DULY SUBMITTED ITS EXPLANATION DURING THE ASSESSMENT PROCEEDINGS WHICH HAS BEEN COMPLETEL Y IGNORED. THE AR HAS FILED THE COPY OF THE LETTER D ATED NIL WHEREIN THE ASSESSEE HAD EXPLAINED THE CAS H FOUND AT THE ASSESSEES PREMISES OWNED BY THE ASSESSEE. T HE SAID 5 CONCERNS AND THE CASH BALANCE AS ON THE S EARCH ITA NO.5576/DEL/2014 9 DAY, AS GIVEN IN THE ASSESSEES SAID LETTER DATED N IL IS REPRODUCED BELOW FOR READY REFERENCE:- 4.2 THE AR SUBMITTED THAT NOT ONLY DID THEY SUBMIT THE LETTER TO THE AO, THEY ALSO SUBMITTED THE CASH BOOK ABSTRACTS OF ALL THE 5 CONCERNS CLEARLY SHOWING THE REIN THE CLOSING CASH BALANCE AS ON THE DAY OF SEAR CH. THE AR SUBMITTED THAT THE APPELLANTS RESIDENCE AND THE ADMINISTRATIVE/REGISTERED OFFICES OF THE SAID 5 CO NCERNS WERE LOCATED IN ONE OF THE SAME BUILDING. THE APPEL LANT WAS KEEPING CASH AT HIS RESIDENCE WHICH BELONG ED TO THE SAID 5 CONCERNS. HE, THEREFORE, SUBMITTED TH AT THE CASH FOUND AT THE ASSESSEES PREMISES WAS DU LY EXPLAINED BEFORE THE AO. THE AO HAS IGNORED THIS EX PLANATION. THE AR HAS NOT SUBMITTED THE COPY OF SWO RN STATEMENT OF THE ASSESSEE, IF ANY, TAKEN ON THE DAT E OF SEARCH. 4.3 I HAVE CALLED FOR THE ASSESSMENT FOLDER AND EX AMINED IT. THE FOLDER CONTAINS VERY DETAILS REPLIES OF THE ASSESSEE. THE AO ISSUED QUESTIONNAIRE DATED 01.03.2 013 SEEKING ASSESSEES EXPLANATION IN RESPECT OF CA SH FOUND AS WELL AS ON THE TRANSACTION NOTED IN THE SE IZED DOCUMENTS. THE ASSESSEE SUBMITTED THE EXPLANAT ION VIDE THEIR LETTER DATED NIL. THIS LETTER ALONG WITH ANNEXURES ARE AVAILABLE IN THE ASSESSMENT FOLDER A ND THE SAME IS DULY RECORDED IN THE NOTE SHEET ALSO. THE A SSESSEE HAD ALSO SUBMITTED DETAILED EXPLANATIONS ON THE SEIZED DOCUMENTS VIDE HIS LETTER DATED 08.03.2013. 4.4 IN SPITE OF THE ABOVE REPLIES/EXPLANATION SUBMITTE D BY THE ASSESSEE, THE AO HAS MENTIONED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION REG ARDING SOURCE OF THE ABOVE CASH. 4.5 I DO NOT THINK THE AO HAS APPLIED HIS MIND ON THE ISSUE PROPERLY. THE WRITTEN EXPLANATION OF THE ASSESSEE SUBMITTED BEFORE THE AO IS REPRODUCED BELO W FOR READY REFERENCE:- 4. WE WOULD HEREBY CLARIFY THAT IN THE COURSE OF SE ARCH AND SEIZURE OPERATION, OUT OF THAT CASH WORTH RS. 1387700/- FOUND FROM THE RESIDENTIAL PREM ISED, 85 BHARAT NAGAR, CASH AMOUNTING TO RS. 11 LACAS & NOT 1 LACS WAS SEIZED. THE SAME SHOULD N OT BE TREATED AS UNEXPLAINED AS THE CASH WITHDRAWN FROM VARIOUS COMPANIES & FIRMS BOOKS OF A CCOUNTS, IN WHICH ASSESSE HAS INTEREST, TANTAMOUNT TO THE SAME AMOUNT APPROXIMATELY. THE S AME HAS BEEN TABULATES AS UNDER :- S.NO. F IRM NAME AMOUNT (IN RS.) 1. OVERSEAS TRADING CORPORATION 5,90,168 2. OVERSEAS CARPETS LIMITED 3,15,948 3. OVERSEAS EXPORTERS 2,67,862 4. OVERSEAS BEAUTY ART FURNITURE EXPORTS PVT. LTD. 1,74,871 5. TRAVEL OVERSEAS INDIA LIMITED 1,15,663 TOTAL 14,64,512/- ITA NO.5576/DEL/2014 10 S.NO. FIRM NAME AMOUNT (IN RS.) 1. OVERSEAS TRADING CORPORATION 5,90,168 2. OVERSEAS CARPETS LIMITED 3,15,948 3. OVERSEAS EXPORTERS 2,67,862 4. OVERSEAS BEAUTY ART FURNITURE EXPORTS PVT. LTD. 1,74,871 5. TRAVEL OVERSEAS INDIA LIMITED 1,15,663 TOTAL 14,64,512/- THE EXCESS CASH IS ON ACCOUNT OF VOUCHERS PENDING AS ON DATE OF SEARCH. 4.6 FROM THE ABOVE IT EMERGES THAT ASSESSEE HAD WITHDRA WN CASH FROM HIS CONCERNS. THE TOTAL SUM WAS APPROXIMATELY SAME AS FOUND DURING THE SEARCH. IN T HE SAME BREATH, THE ASSESSEE HAS ALSO STATED THAT T HE EXCESS CASH IS ON ACCOUNT OF VOUCHERS PENDING AS O N DATE OF SEARCH. 4.7 THE COPIES OF CASH BOOK FOR THE RELEVANT DATE SUBMI TTED DURING APPEAL PROCEEDINGS SHOW CASH BALANCES IN THE BOOKS OF THE CONCERNS WHERE ASSESSE E HAS INTEREST. BUT IT DOES NOT SHOW THAT ASSESSE E HAS WITHDRAWN CASH. FURTHER, IF VOUCHERS ARE PENDIN G, THAT WOULD MEAN EXPENDITURE HAS ALREADY BEEN INCURRED. THUS HE SHOULD NOT HAVE BEEN LEFT WITH CA SH. ON THE DAY OF SEARCH WHEN CALLED UPON TO EXPLAI N THE CASH AVAILABLE AT HIS RESIDENCE THE APPELLANT H AD MENTIONED THAT CASH BELONGS TO THE FOLLOWING THR EE ENTITIES AND ALSO TO THE MEMBERS TO THE FAMILY. 4.8 IN THE SAID STATEMENT HE HAD ALSO STATED THAT H E CASH WAS EXPLAINABLE WITH REFERENCE TO THE WITHDRAWALS FROM THE BANKS. IT IS NOT KNOWN WHAT HE MEANT. BEFORE THE AO THERE IS A CHANGE IN A STAND IN AS MUCH AS IT HAD BEEN STATED THAT THE AMOUNTS REPRESE NTED THE FUNDS DRAWN FROM THE 5 CONCERNS IN WHICH APPELLANT HAD INTEREST. IT IS ALSO CLAIMED THAT THE CASH WAS DUE TO PENDING VOUCHERS. I AM OF THE VIEW THAT HE APPELLANT HAS TRIED TO BRING ON RECORD ALL POSSIBLE EXPLANATIONS WITHOUT PINPOINTING WHAT WERE THE GRO UND FACTS IN HIS CASE. CONSIDERING ALL THESE FACTORS, I HOLD THAT THERE IS NO MERIT IN SUBMISSIONS OF THE ASSESSEE ON THE ISSUE. THE ADDITION ON THE ISSUE IS CONFIRMED, THOUGH ON A DIFFERENT REASONING. 1. M/S. OVERSEAS CARPETS LTD. 2. M/S. OVERSEAS EXPORTERS ITA NO.5576/DEL/2014 11 3. M/S. OVERSEAS TREADING CORPORATION 4.7 IN THE SAID STATEMENT HE HAD ALSO STATED THAT HE CA SH WAS EXPLAINABLE WITH REFERENCE TO THE WITHDRAWAL S FROM THE BANKS. IT IS NOT KNOWN WHAT HE MEANT. BE FORE THE AO THERE IS A CHANGE IN A STAND IN AS MUCH AS IT HAD BEEN STATED THAT THE AMOUNTS REPRESENTED THE FUNDS DRAWN FROM THE 5 CONCERNS IN WHICH APPELLANT HAD INTEREST. IT IS ALSO CLAIMED THAT THE CASH WAS DUE TO PENDING VOUCHERS. I AM OF THE VIEW THAT HE V| APPELLANT HAS TRIED TO BRING ON RECORD ALL PO SSIBLE EXPLANATIONS WITHOUT PINPOINTING WHAT WERE T HE GROUND FACTS IN HIS CASE. CONSIDERING ALL THESE FAC TORS, I HOLD THAT THERE IS NO MERIT IN SUBMISSIONS OF THE ASSESSEE ON THE ISSUE. THE ADDITION ON THE ISSUE IS CONFIRMED, THOUGH ON A DIFFERENT REASONING. 4.8 IN THE SAID STATEMENT HE HAD ALSO STATED THAT HE CA SH WAS EXPLAINABLE WITH REFERENCE TO THE WITHDRAWAL S FROM THE BANKS. IT IS NOT KNOWN WHAT HE MEANT. BEFO RE THE AO THERE IS A CHANGE IN A STAND IN AS MUCH A S IT HAD BEEN STATED THAT THE AMOUNTS REPRESENTED THE FUNDS DRAWN FROM THE 5 CONCERNS IN WHICH APPELLANT HAD INTEREST. IT IS ALSO CLAIMED THAT THE CASH WAS DUE TO PENDING VOUCHERS. I AM OF THE VIEW THAT HE V | APPELLANT HAS TRIED TO BRING ON RECORD ALL POSSIBLE EXPLANATIONS WITHOUT PINPOINTING WHAT WERE THE GROUND FACTS IN HIS CASE. CONSIDERING ALL THESE FAC TORS, I HOLD THAT THERE IS NO MERIT IN SUBMISSIONS OF THE ASSESSEE ON THE ISSUE. THE ADDITION ON THE ISSUE IS CONFIRMED, THOUGH ON A DIFFERENT REASONING. 16. FROM THE ABOVE ITS IS CLEAR THAT LD. CIT(A) REJ ECTED THE ARGUMENTS OF THE ASSESSEE THAT CERTAIN VOUCHERS WER E PENDING FOR WHICH CASH WAS AVAILABLE AND THE STATEMENT OF THE A SSESSEE THAT CASH WAS EXPLAINABLE WITH REFERENCE TO THE WITHDRAWALS F ROM THE BANKS IS NOT PROPERLY UNDERSTOOD. WE FIND THE LD. CIT(A) HA S NOT PROPERLY APPRECIATED THE FACTS OF THE CASE. WHEN THE VOUCHER S ARE PENDING FOR APPROVAL IT CANNOT BE SAID THAT MONEY HAS ALREADY B EEN SPENT. FURTHER WHEN THE DIFFERENT CASH BOOKS OF THE ASSESS EE ARE SHOWING AVAILABILITY OF SUFFICIENT CASH BALANCE ON THE DATE OF SEARCH AND THEY WERE OPERATING FROM THE SAME PREMISES, IT CANNOT BE SAID THAT CASH WAS NOT AVAILABLE. FURTHER IT IS AN ADMITTED FACT THAT ASSESSEE HAS SURRENDERED ADDITIONAL INCOME OF RS.75 LACS IN THE STATEMENT ITA NO.5576/DEL/2014 12 RECORDED U/S. 132 (4). NO DOUBT THE ASSESSEE HAS N OT SURRENDERED THE ABOVE AMOUNT VOLUNTARILY BUT ONLY AFTER BEING A SKED TO EXPLAIN THE TRANSACTIONS APPEARING IN THE DOCUMENTS FOUND A ND SEIZED DURING THE COURSE OF SEARCH OPERATION. HOWEVER THE LOWER A UTHORITIES ARE COMPLETELY SILENT REGARDING THE REQUEST OF THE ASSE SSEE THAT THE CASH FOUND AMOUNTING TO RS.13,87,700/- WILL BE COVERED U NDER THE AMOUNT SURRENDERED DURING THE COURSE OF SEARCH. 17. CONSIDERING THE TOTALITY OF THE FACTS OF THE CA SE WE FIND SOME FORCE IN THE ARGUMENTS ADVANCED BY LD. COUNSEL THAT THE ASSESSEE HAS DECLARED AN AMOUNT OF RS.75 LACS IN THE FINANCI AL YEAR 2010-11 WHICH WILL COVER THE DISCREPANCIES, IF ANY. WE, TH EREFORE, SET ASIDE THE ORDER OF THE CIT (A) AND DIRECT THE ASSESSING OFFIC ER TO DELETE THE ADDITION OF RS.13,87,700/-MADE BY HIM ON ACCOUNT OF UNEXPLAINED CASH. 18. THE GROUNDS OF APPEAL NO. 1 TO 4 RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 19. SO FAR AS GROUND NO.5 IS CONCERNED THE SAME REL ATES TO LEVY OF INTEREST U/S 234 (A)/234(B) WHICH ARE MANDATORY AND CONSEQUENTIAL IN NATURE. THEREFORE, THE SAME IS DISMISSED. 20. THE GROUND OF APPEAL NO.6 BEING GENERAL IN NAT URE IS DISMISSED. 21. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.04.2019. SD/- SD/- (KULDIP SINGH) (R.K PANDA) JUDICIAL MEMBER ACCOUNTAN T MEMBER *NEHA* DATE:- 30 .04.2019 COPY FORWARDED TO: 1. APPELLANT ITA NO.5576/DEL/2014 13 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 02.04.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 30.04.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGIST RAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER