Padam Sain Gupta, Delhi V. ACIT, Central Circle, Karnal

ITA 766/DEL/2022

AI Insights

The case involves an appeal by Padam Sain Gupta against the order of the Commissioner of Income Tax (Appeals)-3, Gurgaon, which confirmed the addition of Rs.3,00,000 to the assessee's income for the Assessment Year 2018-19 under Section 68 of the Income Tax Act. The addition was initially made by the Assessing Officer, who considered only part of the assessee's statement and ignored significant cash withdrawals made shortly before a search and seizure operation. The Tribunal, upon reviewing the circumstances, including the large cash withdrawals and the total cash seized during the search, concluded that the addition was not justified.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 116403 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 03-09-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 24-04-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI BEFORE SH. CHANDRA MOHAN GARG, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No.766/Del/2022 (Assessment Year : 2018-19) Padam Sain Gupta C-5/2A, Opp. CC Colony, Rana Pratap Bagh, North Delhi, New Delhi – 110 005 PAN No. AAPPG 4043 G Vs. ACIT Central Circle Karnal (APPELLANT) (RESPONDENT) Assessee by Shri Ved Jain, Adv. Shri Aman Garg, C.A. Revenue by Shri Mukesh Kumar Jha, CIT-D.R. Date of hearing: 04.09.2023 Date of Pronouncement: 06.09.2023 PER CHANDRA MOHAN GARG, JM : This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-3, Gurgaon dated 28.02.2022 for Assessment Year 2018-19. 2. The Learned Counsel submitted that the Assessing Officer while making addition of Rs.3,00,000/- under Section 68 of the Act has only considered the first part of statement of assessee ignoring the second part of statement and factum of withdrawals of Rs.26,50,000/- immediately before search and seizure operation. The Learned Counsel, therefore, submitted that the addition of ITA No.766/Del/2022 Padam Sain Gupta vs. ACIT 2 Rs.3,00,000/- is not sustainable in view of large cash withdrawal by the assessee immediately before the search and seizure operation. 3. The Learned CIT-DR strongly supported the orders of the authorities below. 4. Since from para 4.3, we clearly observed that Learned CIT(A) despite noticing that the assessee withdrew Rs.8,50,000/-, Rs.9,00,000/- and Rs.9,00,000/- on 15.12.2017, 18.12.2017 and 26.12.2017, total Rs.26,50,000/- immediately before the date of search, which was 22.01.2018. The Learned CIT(A) out of total cash seized during the course of search of Rs.10,00,750/- allowed part relief of Rs.7,00,750/- keeping in view amount of cash withdrawals by the assessee but confirmed the addition of Rs.3,00,000/- by observing that the appeals has not discharged his onus regarding said amount of Rs.3,00,000/- and thus the same remained unexplained. 5. In our considered view, when the assessee has huge cash withdrawals immediately before the date of search and in the second part of his statement, recorded during the course of search, replying to question no.24, he categorically stated that the cash withdrawals from the bank of Rs.26,50,000/- as well as Rs.3,00,000/- from contract totalling to Rs.29,50,000/- cash was available with him and out of said cash amount, there was renovation work was going on in his factory building at Madanpur Road. In our considered opinion, during search and seizure operation, the cash amount Rs.10,00,710/- was found and seized on 22.01.2018 and immediately before preceding month of December, 2017 there were withdrawals of ITA No.766/Del/2022 Padam Sain Gupta vs. ACIT 3 Rs.26,50,000/- cash by the assessee, which is much higher than the cash amount seized during the course of search. Therefore, no addition could have been made in the hands of the assessee under Section 68 of the Act. Accordingly, sole grievance of the assessee is allowed and AO is directed to delete the addition. 6. In the result, appeal of assessee is allowed. Order pronounced in the open court on 06.09.2023 Sd/- Sd/ (M BALAGANESH) (CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 06.09.2023 Priti Yadav, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI