THAKUR FITNESS WORLD PRIVATE LIMITED,PHILLAUR, JALANDHAR V. JOINT COMMISSIONER OF INCOME TAX (OSD), CENTRAL CIRCLE - JALANDHAR

ITA 445/ASR/2024

AI Insights

The case involves M/s Thakur Fitness World Pvt. Ltd., a company engaged in manufacturing and trading gym equipment and food supplements, which appealed against the addition of Rs. 13 Lacs to its income as unexplained cash. This amount was seized from an employee, Shri Pawan Singh, during a cash seizure operation. The company's director claimed the cash was from sales of gym setups and PVC wall fittings. However, the initial assessment added this amount to the company's income under sections 69A and 115BBE of the Income Tax Act, citing lack of concrete evidence. The Tribunal's decision overturned the lower authorities' findings, accepting the company's explanation and evidence provided during the appellate proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398005 (ITAT-AMRITSAR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANPREET SINGH DUGGAL LD.
• Assessee Lawyers: KUSHAL CHOPRA LD
• Section: 143(3)

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, AMRITSAR BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI UDAYAN DAS GUPTA, JM आयकरअपीलसं./ ITA No. 445/ASR/2024 (िनधाŊरणवषŊ / Assessment Year: 2020-21) M/s Thakur Fitness World Pvt. Ltd. B-7, Shop No. 72, Thakur Complex 1st Floor, Lakkar Mandi Phillaur, Jalandhar-144410 बनाम/ Vs. JCIT (OSD) Jalandhar. 144001.. ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. AAFCT-5466-K (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Kushal Chopra (CA) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Sh. Manpreet Singh Duggal- Ld. Sr.DR सुनवाईकीतारीख/Date of Hearing : 25-03-2025 घोषणाकीतारीख /Date of Pronouncement : 06-06-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2020-21 arises out of an order of learned Commissioner of Income Tax (Appeals)-5, Ludhiana [CIT(A)] dated 12-06-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 28-12-2019. The sole grievance of the assessee is confirmation of addition of Rs.13 Lacs. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. The assessee being resident corporate entity is stated to be engaged in 2 manufacturing and trading of gym equipments and food supplements as well as well as trading of raw wool, PVC panels etc. 2. Pursuant to seizure of cash of Rs.13 Lacs from the possession of one Shri Pawan Singh on 07-04-2019, the impugned assessment was framed against the assessee. Shri Pawan Singh is stated to be an employee of assessee-company. The director of the assessee- company owned up the cash and stated that the cash was received against sale of gym set-ups and PVC wall fitting from Ludhiana and surrounding areas. However, the assessee failed to file concrete evidence in this regard. Consequently, Ld. AO added the same to the income of the assessee as unexplained cash u/s 69A r.w.s. 115BBE. 3. During first appeal, the assessee’s submissions were subjected to remand proceedings. The assessee pointed out that it had furnished cash book for financial year 2018-19 and also from 01-04-2019 to 05- 04-2019 along with seals invoices, journals, transportation documents, KYC details of customers to DDIT (investigation). The assessee stated that Shri Vimal Singh, Director was having cash balance of Rs.13.62 Lacs on 06-04-2019 out of which Rs.13 Lacs was delivered by him to Shri Pawan Singh for handing over the same to another director at Phillaur. During appellate proceedings, the assessee furnished Balance Sheet, cash flow statement and Profit & Loss Account along with performa invoice, copy of ledger account of different parties to support the availability of cash-in-hand in its books of accounts. However, Ld. CIT(A) confirmed the assessment, inter-alia, on the ground that the 3 assessee had failed to produce the said documents at the time of seizure. Aggrieved, the assessee is in further appeal before us. 4. From the facts, it emerges that the assessee was required to explain the source of impugned cash of Rs.13 Lacs which was found from the possession of one of his employees. It also emerges that the assessee has two directors i.e., Shri Deepak Kumar and Shri Vimal Singh. The cash at the business premises of the assessee was being handled by Shri Deepak Kumar and collection of sales proceeds and other cash transactions were handled by Shri Vimal Singh from his office at Ludhiana. As per cash book, Shri Deepak Kumar was having cash in hand for Rs.4.27 Lacs whereas it had cash imprest of Rs.9.70 Lacs with Shri Vimal Singh as on 31-03-2019. Both these balances were duly reflected in audited financial statements for the year ending 31-03-2019. During the period from 01-04-2019 to 06-04-2019, Shri Vimal Singh received various cash payment aggregating to Rs.3.92 Lacs which increased imprest balance to Rs.13.63 Lacs which was in the possession of Shri Vimal Singh at Ludhiana. Out of this amount, Rs.13 Lacs was handed over to Shri Pawan Singh for delivering the same to Shri Deepak Kumar who would have transferred the amount from imprest account to cash-in-hand. All these facts were duly explained by Shri Deepak Kumar in his statement dated 13-05-2019 recorded before DDIT (Investigation). Quite clearly, the assessee had imprest closing cash balance of Rs.9.70 Lacs as on 31-03-2019 as per its audited financial statements. There is no other utilization shown for this balance. On these facts, in our considered opinion, the assessee 4 has duly explained the source of impugned cash of Rs.13 Lacs and accordingly, the impugned addition is not sustainable on facts of the case. We order so. 5. The appeal stand allowed in terms of our above order. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (UDAYAN DAS GUPTA) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER लेखासद˟ /ACCOUNTANT MEMBER Dated: 06 -06-2025 आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT AMRITSAR "