We have heard Mr. Manav A. Mehta, leanred Central Government Standing Counsel appearing for the Revenue in this Tax Appeal which has been filed on the following proposed substantial question of law :- “Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in deleting addition of Rs.25 Lacs made by the Assessing Officer on account of cash found and seized ?”
2. The assessee carries on business “Angadia” (transporting of parcels and cash from one place to another). A search under Section 132 of the Income Tax Act, 1961 (for short 'the Act') was carried out on Mini Bus No.MH-04-S-1298 belonging to M/s. Patel Ambalal Hargovandas and Company at Mumbai Railway Station on 21.7.2004. During the search, it was found that the Bus was carrying the cash and parcels belonging to various Angadias. During the course of search, total seizure of Rs.2,17,04,640/- was made which consisted of cash of Rs.1,33,05,000/- and jewellery and diamond of Rs.83,99,640/-. Since the cash belonging to assessee was seized, a notice under Section 153C of the Act was issued on 14.10.2005 for the Assessment Year 1999-2000 to 2004-05 which was served on the assessee on 15.10.2005. The assessee filed his return of income on 20.9.2005 declaring his total income of Rs.3,22,001/-. A notice under Section 143(2) dated 31.1.2006 was issued and served on the assessee on 7.2.2006. Subsequently, a notice under Section 142(1) along with questionnaire was issued and sent to the assessee. In response to the notice, the Chartered Accountant of the assessee appeared and filed the details called for. After considering the explanation given by the Chartered Accountant of the assessee and details filed by the assessee, the Assessing Officer in his assessment order dated 31.10.2006 held that no satisfactory explanation with regard to source of cash of Rs.25 Lacs could be declared by the assessee and, therefore, the amount of Rs.25 Lacs was added to be the income of the assessee.
3. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for short CIT (A)]. The CIT (A) by his judgment dated 23.11.2007 held that the assessee had furnished copies of relevant pages of cash book which showed that the cash balance of more than Rs.25 Lacs at Mumbai office and the cash so sent was also recorded on the date of search. Therefore, the assessee's version was supported as per the cash book of Mumbai office. The Assessing Officer has made the addition of Rs.25 Lacs on suspicion. The CIT (A) deleted the additions made by the Assessing Officer. The relevant part of the findings recorded by the CIT (A) in paragraph 6 is extracted below :-
“The appellant has furnished copies of the relevant pages of cash book which clearly show that there was cash balance of more than Rs.25 Lacs at Mumbai office and that the cash so sent was also recorded on the date of search. Thus all the evidences found at the time of search and explanation given in the course of assessment proceedings by the appellant are supporting the appellant's claim that the cash so seized was as per the cash book of Mumbai office. The A.O. has simply stated that the reasons for transfer of cash from Mumbai to Ahmedabad are not given and that the transfer could have been to Head office. I am of the view that it is for the assessee to decide as to where the cash is required and it is not the A.C. who has to decide as to where the cash should be transferred. The evidence that the appellant had at the time of search itself explained that such cash was out of the cash balance as per the books of Mumbai and it is recorded in the said cash book is sufficient to prove that the cash was duly accounted for. Considering all these aspects, I hold that the addition of Rs.25 Lacs made by the A.O. deserves to be deleted. This ground of appeal is accordingly allowed.”
4. Against the said order of the CIT (A), the Revenue filed an appeal before the Tribunal and the Tribunal has affirmed the findings of the CIT (A) by judgment dated 3.9.2010 and has held that the employee of the assessee who was present at the time of search had explained the details of cash which was belonging to the assessee itself.
5. We do not find that the question proposed by the revenue raises any substantial question of law. This appeal is concluded by finding of facts and is accordingly dismissed.
Sd/-
[V. M. SAHAI, J.] Sd/-
[N. V. ANJARIA, J.] Savariya