2012 (9) TMI 1223 - HC - Income Tax

High Court Upholds Tribunal Decision on Deletion of Rs. 25 Lacs Addition

Commissioner of Income Tax-II Versus M/s. Patel Natverlal Chinubhai & Company

The Income Tax Appellate Tribunal's decision to delete the addition of Rs. 25 Lacs made by the Assessing Officer on account of cash found and seized ... - Issues involved:The issue involved in this case is whether the Income Tax Appellate Tribunal was right in law in deleting the addition of Rs. 25 Lacs made by the Assessing Officer on account of cash found and seized during a search conducted under Section 132 of the Income Tax Act, 1961.Details of the Judgment:1. The assessee, engaged in the business of 'Angadia,' had cash and parcels seized during a search at Mumbai Railway Station. The total seizure amounted to Rs. 2,17,04,640, including cash of Rs. 1,33,05,000. A notice under Section 153C of the Act was issued for the Assessment Year 1999-2000 to 2004-05. The Assessing Officer added Rs. 25 Lacs to the assessee's income as no satisfactory explanation regarding the source of this cash was provided.2. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT (A)], who found that the cash balance of over Rs. 25 Lacs at the Mumbai office was supported by the cash book, indicating that the seized cash was as per the Mumbai office's records. The CIT (A) held that the addition made by the Assessing Officer was based on suspicion and deleted the same.3. The Revenue appealed to the Tribunal, which upheld the CIT (A)'s decision, noting that the employee present during the search had explained the details of the cash belonging to the assessee. The Tribunal affirmed the findings of the CIT (A) on 3.9.2010.4. The High Court observed that the revenue's proposed question did not raise any substantial question of law. The Court concluded that the appeal was based on findings of fact and dismissed it accordingly.