The Delhi bench of the Income Tax Appellate Tribunal ( ITAT ) deleted the addition of Rs. 89 lakhs under Section 69 of the Income Tax Act, 1961 after the source of cash seized by the Central Bureau of Investigation ( CBI ) from the corporate office was well explained.
The assessee Eldeco Infrastructure & Properties Ltd. Company was engaged in the business of development of residential complexes and commercial malls. The assessee company is following Percentage of Completion Method ( POCM ) of accounting for recognizing the expenses and revenue under a project.
The return of income for the Asst Year 2013-14 was filed by the assessee company on 30.9.2013 declaring total income of Rs 22,39,21,281/-, which was later revised declaring total income of Rs 9,72,36,688/-. During the year, Central Bureau of Investigation (CBI) seized Rs 89, 00,000/- cash on 10.6.2012 from the locker room of the assessee company from its corporate office at 201-12, Splender Forum, Second Floor, Jasola District Center, and New Delhi.
The assessee was asked to furnish the source of such cash found in the locker. The assessee explained that it had sufficient cash balance in its cash book as on 10.6.2012 of Rs 98,38,316/- and that out of the same, a sum of Rs 89,00,000/- was kept in the locker room which was found and seized by CBI.
AO not willing to understand the accounting model and the books of accounts of the assessee not once but twice by holding that the assessee had not explained the cash of Rs 89 lakhs found and seized from its locker room by CBI. It is very strange to understand as to how a senior level officer like Chief Commissioner of Income Tax (CCIT) had accorded his authorization u/s 253(2) of the Act to file appeal before this Tribunal in the instant case.
Further the accounting model and the books of accounts of the assessee not once but twice by holding that the assessee had not explained the cash of Rs 89 lakhs found and seized from its locker room by CBI. It is very strange to understand as to how a senior level officer like Chief Commissioner of Income Tax (CCIT) had accorded his authorization under Section 253(2) of the Income Tax Act to file an appeal before this tribunal in the instant case.
The two member bench of the tribunal comprising Amit Shukla( Judicial member) and M. Balaganesh ( Accountant member) found that the source of cash amounting to Rs. 89.00.000/- seized by Central Beuro of Investigation from the corporate office of the appellant is well explained, the addition made on account of deemed income under Section 69 of Income Tax cannot be sustained.
ITAT did not deem it fit to interfere in the order of the CIT (A) in the instant case. Accordingly, the grounds raised by the revenue were dismissed.
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