TaxTMI 
TaxTMI 
TaxTMI 
2016 (10) TMI 410
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....2. The learned CIT(A) further erred in treating the seized cash as unexplained income in the hands of Your Appellant. 3. The learned CIT(A) failed to appreciate the following; a) The cash belonged to Leshark Exports P. Ltd. and the same was sufficiently proved by the documentary evidence submitted at the time of search itself. b) The company has also confirmed that the cash belonged to it." 3. The brief facts of the case are that in the instant case proceedings u/s 132(1) of the Act were initiated and conducted by the DDIT (Inv.) Unit -III(2), Mumbai on 28th/29th November, 2006 on the basis of information received from DDIT (Inv).AIU New Delhi, that the passenger Shri Ajay Balwant Sabharwal was travelling by Jet Air Ways Flight No. 9W 325 from Delhi to Mumbai carrying with him cash to the tune of Rs. 20 lacs. During the course of proceeding u/s. 132 of the Act , a statement u/s 131 of the Act was recorded of Shri Ajay Sabharwal who stated that he was currying the cash under authority of M/s Le Shark Exports Pvt. Ltd. and the said cash belong to the said company and he was also carrying a letter from the said company. While recording the statement he stated that he was one of....
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.... the Act on 15th December, 2008 whereby he again reiterated that he got the money from Shri Kiran Bhat , accountant of Le Shark Exports Private Limited in his office two three days back from the date of seizure and did not knew the denomination. It was confirmed that he was authorized by M/s Le Shark Exports (P) Ltd. for purchase of machinery from Delhi and he was carrying a letter specifying carrying of money. Thus, in nut-shell he submitted that cash of Rs. 20 lacs belonged to Le Shark Exports Private Limited. The statement of Mr. Kiran Bhat was also recorded who is the Accountant of Le Shark Exports P. Ltd. whereby he confirmed that he is working as Accountant of Le Shark Exports P. Ltd. for the last 12 years. He stated that he had handed over the money to Shri Ajay Sabharwal on 23rd or 24th November, 2006 and also handed over a letter to Shri Ajay Sabharwal. The A.O. observed that Shri Ajay Sabharwal reached Delhi on 28th November, 2006 and returned to Mumbai on the same day and had a very limited time for inspection or quality/type of machine etc. unless he chalked out the kind of machine as per the requirement of M/s. La Shark Exports (P) Ltd. before hand. There was no consul....
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.... assessee filed his first appeal before the ld. CIT(A). 5. Before the ld. CIT(A) , the assessee submitted that the assessee is proprietor of M/s In-design providing consultancy services in connection with textile production and exports. He submitted that he was travelling by Jet Airways Flight No. 9W 325 from Delhi to Mumbai on 28-11-2006 carrying with him cash of Rs. 20 lakhs. The assessee submitted that he suo moto informed the airport authority at Delhi that he was carrying cash of Rs. 20 lakhs along with the authority letter of Le - Shark Exports Pvt. Ltd. On reaching Mumbai, Deputy Director of Income Tax (Investigation) Unit - III, Mumbai, on the basis of information received from Deputy Director of Income Tax (Investigation) AIU, New Delhi, initiated and conducted proceedings u/s 132 of Act and took the assessee to Income Tax Office at Scindia House without any legal warrant or notice and seized the cash of Rs. 20 lacs from the possession of the assessee. The assessee submitted that the Revenue before taking action u/s 132 of the Act should have reason to believe that the amount of money has not been disclosed or will not be disclosed as income. The belief has to be a bonafi....
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....hen the assessee was intercepted at the airport at Delhi and Mumbai, he was in possession of the authority letter issued by the company Le Shark Exports P. Ltd that the said cash belonged to them and the assessee was carrying the same for the purposes of advancing the same for purchase of machinery. The assessee submitted that the books of account of the company and the other evidences were submitted immediately on interception by the tax-authorities within five hours of interception at Mumbai airport. The ld. CIT(A), however, rejected the contentions of the aseessee and held that the assessee could not give proper reply to the satisfaction of the Revenue. He observed that the assessee has got the money from one Shri Kiran Bhatt , Accountant of M/s. Le-Shark Exports Pvt. Ltd. in his office 2-3 days back along with letter from the Company Le Shark Exports P. Ltd specifying conveying of the money. The assessee further disclosed that he was given this money for purchase of the machinery from Delhi, but when he was asked whether he had any consultation with Mr. Anil Shah, Director of M/s. Le-Shark Exports Pvt. Ltd for purchase of any machinery of any particular type from Delhi, then he....
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.... of machinery on behalf of Le Shark Exports P. Ltd and the said cash belonged to Le Shark Exports P. Ltd. The assessee was carrying Rs. 20 lakhs on behalf of Le Shark Exports P. Ltd. for purchase of machinery. The relevant letter dated 28th November 2006 by Le Shark Exports P. Ltd. is placed in paper book page 11. The assessee submitted that he was going to Delhi from Mumbai, he did not declare the cash while at the time of returning he declared at Delhi Airport. The DDIT (Inv) , Mumbai on arrival at Mumbai intercepted him and took him to Income Tax Office whereon he explained that the cash belonged to Le Shark Exports P. Ltd. for purchase of machinery and also produced the said letter dated 28th November, 2006 issued by Le Shark Exports P. Ltd owning the said cash. The ld. Counsel submitted that within short span of 5 hours, all the records were called from the office of the said company Le Shark Exports Private Limited, Tirupur by FAX and submitted to the income Tax authorities which clearly showed that this amount was withdrawn from Corporation bank, Tirupur of Le Shark Exports P. Ltd on 19th October, 2006. The copies of the said bank statement have been placed at paper book pag....
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....ied on the decision of Hon'ble Supreme Court in the case of CIT v. Vindhya Metal Corporation(1997) 224 ITR 614(SC). 7. The ld. D.R. relied on the orders of authorities below and submitted that the facts are not disputed. 8. We have considered the rival contentions and also perused the material placed on record. We have observed that the assessee was travelling from Delhi to Mumbai on 28th November, 2006 by Jet Airways flight . He was carrying cash amount of Rs. 20 lakhs while traveling to Mumbai on 28-11-2006. He was intercepted by the CISF at Delhi Airport. The information was passed on to Mumbai and when he landed in Mumbai, he was intercepted in Mumbai and was taken to the Income tax office. The assessee was carrying with him while flying a letter dated 28-11-2006 issued by Le Shark Exports P. Ltd confirming that the cash of Rs. 20 lacs which he was carrying was on behalf of Le Shark Exports Pvt. Ltd. for advancing amount for purchase of the machinery which was duly submitted by the assessee to the Income tax authorities at the time of interception. The assessee, within a short span of five hours obtained all the documents by FAX from the Tirupur office of Le Shark Exports Pri....
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.... is accounted as advance tax by M/s Le Shark Exports Pvt. Ltd in its books of accounts, but the Revenue has not accepted the contentions of the assessee and passed assessment order u/s 143(3)/153A of the Act making additions in the hand of the assessee to the tune of Rs. 20 lacs as undisclosed income. We have observed that as per the provisions of section 132(4A) of the Act where any books of account, other documents, money , bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of search u/s 132(1) of the Act, it may be presumed that such books of account, other documents, money , bullion, jewellery or other valuable article or thing belong or belongs to such person and that the contents of such books of account and other documents are true. Thus, during the course of search u/s 132(1) of the Act, the Revenue found cash of Rs. 20 lakhs in the possession of the assessee which was seized from the assessee the presumption arose u/s 132(4A) of the Act that the assessee is the owner of the said cash of Rs. 20 lacs but this presumption is rebuttable. The assessee has duly rebutted the presumption by bringing on rec....