Appeal partially allowed, cash amount return ruled unjustified. Dismissed irrelevant grounds, directed AO.

The Tribunal partly allowed the appeal, ruling that the addition of the cash amount was unjustified as it belonged to another company and was returned in due course of business. The Tribunal dismissed irrelevant grounds and directed the AO accordingly, refusing to comment on certain provisions as they were not applicable in this context.

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Issues:
1. Addition of cash found during search operation
2. Confirmation of cash belonging to another company
3. Justification of cash amount in premises
4. Assessment of unexplained cash

Issue 1: Addition of cash found during search operation
The appeal was against the order of CIT(A) confirming the addition of a specific amount of cash found during a search operation. The AO had made an addition of a certain amount as unexplained cash found during the search. The assessee filed a return declaring income from business and profession. The CIT(A) partly allowed the appeal, deleting a portion of the addition but upholding and confirming the remaining amount. The main ground of appeal before the Tribunal was related to this specific addition.

Issue 2: Confirmation of cash belonging to another company
During the assessment proceedings, the assessee submitted that the cash amount in question belonged to another company, M/s MGF Development Ltd. The confirmation regarding this was furnished during the course of assessment proceedings. The Tribunal noted that the MD of the company had stated that relevant details would be provided for verification. The AO alleged that the confirmation was an afterthought as it was furnished after more than two years of the search. The Tribunal found that the amount in question was returned by the assessee to M/s MGF Development Ltd., as reflected in the books of accounts, indicating that the cash belonged to the other company and was returned in due course of business.

Issue 3: Justification of cash amount in premises
The AO observed that the books produced did not reflect the cash in hand despite giving sufficient opportunity to explain the cash found in the premises. The assessee provided explanations during the assessment and appellate proceedings, stating that the cash was an imprest amount received from M/s MGF Development Ltd. The Tribunal found that the explanation provided by the assessee was sustainable and that the authorities were not justified in making and confirming the addition on this amount.

Issue 4: Assessment of unexplained cash
The DR contended that the onus was on the assessee to provide a proper and justified explanation for the cash amount, which required a deep inquiry into the books of accounts and bank statements of both parties. However, the Tribunal found that the assessee had sufficiently explained that the cash belonged to another company and was returned in due course of business. The Tribunal allowed the sole ground of the assessee, holding that the authorities below were not justified in making and confirming the addition.

In conclusion, the Tribunal partly allowed the appeal, emphasizing that the addition of the cash amount in question was not justified as it belonged to another company and was returned in due course of business. The Tribunal dismissed irrelevant grounds and directed the AO accordingly, refusing to comment on certain provisions as they were not applicable in this context.

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