INCOME TAX ACT, 1961

Section 69A

Income from undisclosed sources - Addition under section 69A - Cash seized during search -

During search in assessee's case, amounting to Rs. 5,34,000 was found and seized. Assessee submitted that same represents business receipts and withdrawal of cash from its books of account and in support, assessee furnished copy of his cash book and other details. However, same was not found acceptable to AO for the reason that there was no supporting evidence in respect of opening cash balance of Rs. 5,95,790 in the cash book. Secondly, assessee failed to produce any supporting evidence to substantiate cash sales during the year which justifies the cash-in-hand of Rs. 5,34,000. Accordingly, AO made addition under section 69A. Held: As far as opening cash balance of Rs. 5,95,790 was concerned, same had been duly substantiated and examined by AO and in absence of any adverse finding in assessment year 2016-17, no adverse finding could be recorded for such opening cash balance in assessment year 2017-18. Regarding cash sales executed during the year under consideration, same were duly supported by the sales and purchase bills in respect of which no adverse finding was recorded by AO. Thus, cash seized admittedly belonged to assessee and through return of income, statement of affairs, cash flow statement for the previous year and cash book for the year under consideration, source of cash so seized had been duly explained in form of sales and opening cash balance duly recorded in books of account. Accordingly, there was no basis for making addition in the hands of assessee.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2011-12 to 2016-17

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