Delhi ITAT: Cash Found At The Time Of Search Can Be Explained By The Availability Of Cash With Different Companies

Delhi Bench of Income Tax Appellate Tribunal (ITAT) ruled that the cash availability with distinct firms is enough to elaborate on the cash revealed at the time of the investigation.

The assessing officer assessed the 9 group references and firms as well as accepted the in-hand cash availability in the respective books of accounts, the bench of Astha Chandra (Judicial Member) and N.K. Billaiya (Accountant Member) observed.

Hence, sending the matter back to the Assessing Officer for cash verification, already examined during the assessment order, would be pointless. During the search and seizure operation, Rs. 2,65,31,500 in cash was discovered at New Delhi premises, including the Noida Office and its plant. Of this, Rs. 2,09,99,150 was seized.

The assessee was questioned about this cash. Despite the statement from the accountant, Shri Pradeep Mishra, no satisfactory explanation or reconciliation with the cashbook was provided. Consequently, the Assessing Officer had to consider the Rs. 2,65,31,500 as unexplained income, adding it under Section 69A of the Income Tax Act.

In their appeal to the CIT (A), the assessee clarified that the cash discovered belonged to various companies or entities within the SMC Group, and this cash was duly recorded in the cash books of those entities. The CIT(A) believed that other businesses were operating from the same location, with cash balances not considered during the addition at the time of the search.

The department argued that the assessee only provided cash statements from group companies and individuals to the CIT(A), who accepted these without seeking a report from the Assessing Officer. Verification of these documents is necessary, suggesting the issue be sent back to the assessing officer.

However, the tribunal saw no need to recheck facts already verified by the assessing officer, deeming it unnecessary and illogical to remand the matter for further verification.