The Income Tax Appellate Tribunal ( ITAT ), Chandigarh Bench has held that the addition of unexplained income u/s 69 is not sustainable in the presence of the duly audited regular books.
The appellant, M/s Rajan group where search and seizure operation u/s 132(1) of the Income Tax Act, 1961 was conducted and various incriminating documents were found and seized from the business and residential premises of the group. The assessee filed a return of income declaring income at Rs.10,30,070/- for the notice issued u/s 153A of the Act. The assessee declared income from salary, business and other sources.
The assessee filed detailed submission and an adverse view was taken by the AO in the case of cash deposited in M/s Syna Creations for which the assessee failed to submit any satisfactory reply regarding cash deposited and the same charged to tax u/s 69A of the Act. The AO invoked the provisions of section 115BBE of the Act and held that tax was imposable @ 60%.
The assessee stated that the assessee had been regularly filing her return of income year after year and had also been maintaining regular books of account which were duly audited and the assessee was maintaining such books of account for both the concerns separately. Further contended that the AO has not pointed out any discrepancy in the books of account.
Shri N K Saini, vice president and Shri Sudhanshu Srivastava, judicial member observed that the AO had no sound reason to reject the contention of the assessee about the source of cash deposits made in the bank account of M/s Syna Creations especially when the deposits have been routed through the regular books of account of the assessee. Further observed the AO has proceeded in a very hasty and an illogical manner without taking a holistic view of the entire case record.
The Tribunal set aside the order of CIT(A) in the absence of incriminating material which would point out towards the assessee introduced her unaccounted cash into the books of account. The appeal filed by the assessee was partly allowed. Shri Sudhir Sehgal appeared for the assessee and Shri Sarabjeet Singh appeared for the revenue.
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