The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition under Section 69A of the Income Tax Act 1961 as it was imposed based upon the maintenance of cash of company at residence mixed with cash of family members during the search proceedings.
A search and seizure action under Section 132 of the Income Tax Act 1961 was carried out in Easy Trip Planners Pvt. Ltd . (ETPPL) group of cases on 10. 08 .2017 during F.Y . 2017-18. During search the residence of the assessee, Nishant Pitti, cash was found and out of the same some was seized .In response the assessee stated that this was the collection money received from agents, clients and corporates and some cash was family savings.
As per the reply of the assessee the cash belonging to the family members was appearing in the personal Balance Sheet of the family members as on 31 .03.2017 . As regards cash belonging to Pitti Coal Company and Easy Trip Planners Pvt. Ltd. the assessee had submitted extracts of Cash Book for the period from 01 .04.2017 to 10 .08.2017. The AO in the order had observed that the contention o f the assessee was not acceptable since the assessee had failed to file the cash balance available with the family members as on the date of search.
The AO further observed that the assessee had made contradictory statements on two occasions. The assessee on the date of search had stated that the cash was from collection agents, however during the assessment proceedings, the assessee had stated that cash belonged to family members and furnished statement of affairs of family members as on 31 .03 .2017 . However, the assessee failed to furnish cash flow statements from 01.04.2017 to 10.08 .2017 i.e. the date o f search. The assessee also failed to establish that the cash belonged to business receipt o f the company namely Easy Trip Planners Pvt. Ltd . through some tangled documents.
Nirbhey Mehta,appeared on behalf of the assessee and Smita Singh,appeared on behalf of the revenue.
The two-member Bench of C. M. Garg, (Judicial Member) and B. R. R. Kumar, (Accountant Member) observed that the argument of the CIT(A) that if at all the cash was kept at residence , then the same must be kept separately and not mixed with cash of the family members could not be accepted.
The Bench owing to the availability of the cash in the accepted books of accounts of the company as well as accepted statement affairs filed by the family members ,allowed the appeal filed by the assessee holding that no further addition was required on account of cash found at the premises.
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