Availability Of Cash With Different Companies Is Sufficient To Explain Cash Found At The Time Of Search: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the availability of cash with different companies is sufficient to explain the cash found at the time of the search.

The bench of Astha Chandra (Judicial Member) and N.K. Billaiya (Accountant Member) has observed that the very same Assessing Officer assessed the nine group concerns and companies and accepted the availability of cash in hand in the respective books of accounts. Therefore, it would be a futile exercise to remit the matter to the file of the Assessing Officer for verification of the availability of cash, which has also been verified by the Assessing Officer at the time of framing the respective assessment orders.

During the course of the search and seizure operation, cash amounting to Rs. 2,65,31,500 was found on the premises of New Delhi, including the Noida Office and its plant, out of which cash of Rs. 2,09,99,150 was seized.

The assessee was asked to explain the availability of cash found on the premises, as mentioned above. The statement of the accountant, Shri Pradeep Mishra, was also recorded, who failed to explain and reconcile the cash found with the cashbook. The Assessing Officer was left with no choice but to treat the cash of Rs. 2,65,31,500 as unexplained money and add it under Section 69A of the Income Tax Act.

The assessee agitated the matter before the CIT (A) and explained that cash found during the course of the search belonged to various companies or concerns of SMC Group, and cash so found was available in the cash book of the companies or concerns of SMC Group.

The CIT(A) was convinced that there were other concerns also operating from the same premises, and the cash balance in those concerns as of the date of the search was not taken into account while making the addition.

The department contended that the assessee furnished the statement of cash available with the group companies and individuals only before the CIT (A). A CIT(A) simply accepted the submissions of the assessee without calling for any remand report from the Assessing Officer. The documents need verification, and, therefore, the issue may be restored to the file of the assessing officer.

The tribunal did not find it necessary or logical to remit the matter for verification of the same facts that had already been verified by the assessing officer.

Counsel For Appellant: Salil Aggarwal

Counsel For Respondent: T. James Singson

Case Title: DCIT Versus M/s Creamy Foods Ltd

Case No.: ITA No. 2179/DEL/2022

Click Here To Read The Order