Tribunal rules in favor of trading-retailers company, deeming unexplained cash addition unsustainable The Tribunal allowed the appeal, ruling that the addition of Rs. 50 Lakhs as unexplained cash under section 69 of the Income Tax Act, 1961 for A.Y. ...
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Tribunal rules in favor of trading-retailers company, deeming unexplained cash addition unsustainable
The Tribunal allowed the appeal, ruling that the addition of Rs. 50 Lakhs as unexplained cash under section 69 of the Income Tax Act, 1961 for A.Y. 2011-12 was unsustainable due to lack of credible evidence. The appellant, a trading-retailers company, successfully argued that the alleged cash payment to M/s. Eureka Builders was not supported by seized materials and legal notices, which indicated the amount was shown as payable in their books due to litigation, leading to the deletion of the addition.
Issues: The judgment involves the issue of addition of Rs. 50 Lakhs on account of unexplained cash u/s. 69 of the Income Tax Act, 1961 for A.Y. 2011-12.
Summary: The appellant, a trading-retailers company, filed its return of income for A.Y. 2011-12. Subsequently, a search u/s. 132 of the Act was conducted in related cases, leading to the discovery of incriminating documents regarding a cash payment of Rs. 50 Lakhs to M/s. Eureka Builders. The appellant denied making this payment, stating it was a tactic to rebut a legal notice for recovery. The Ld.AO added the amount to the total income, upheld by the Ld.CIT(A), prompting the appeal.
The appellant contended that no cash payment was made, supported by seized materials and legal notices from M/s. Eureka Builders. They argued that the amount was shown as payable in their books due to litigation. The Ld.Counsel emphasized that the addition was based on a fabricated entry and urged for its deletion.
The Ld.DR supported the addition, citing the entry in the appellant's accounts as proof of cash payment. However, the Tribunal found that both parties denied the payment, and the legal notices contradicted the assertion of actual cash transfer. The authorities failed to consider these crucial documents, leading to the deletion of the addition as unsupported by evidence.
Ultimately, the Tribunal allowed the appeal, ruling the addition of Rs. 50 Lakhs as unexplained cash to be unsustainable due to lack of credible evidence.
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