TaxTMI 
TaxTMI 
2020 (9) TMI 577
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....6 for the year under consideration declaring total income at Rs. 69,82,640/-. The assessee belongs to Ramesh Chand Manihar Group, Jaipur on whose premises a search u/s 132 of the Act was carried out on 7-01-2016. Various assets/books of account and documents were found and seized as per annexure prepared during the course of search. Finally, the AO completed the assessment u/s 143(3) r.w.s. 153B(1)(b) of the Act vide order dated 28-12-2017 at a total income of Rs. 73,52,425/- as against returned income of Rs. 69,82,640/-. The AO also made an addition of Rs. 18,315/- on account of disallowance of interest on TDS. 2.2 Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A) who after considering the facts and circumstances of the case, dismissed the appeal filed by the assessee. 2.3 Now aggrieved by the order of the ld. CIT(A), the assessee preferred the present appeal before us on the grounds mentioned hereinabove. 3.1 The Ground No. 1 of the assessee relates to challenging the order of the ld. CIT(A) in sustaining the addition of Rs. 3,51,470/- made by the AO on account of unaccounted cash found at the time of search. 3.2 The ld.AR appearing on b....
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....und at the time of search 57,500 Less :- cash stolen as stated in search statement 5,00,000 -5,75,967 Combined Cash Balance as per Books of account worked out by AO 7,21,630 Combined Physical cash assessee + The Cargo 10,73,100 Addition made for excess cash 3,51,470 iii) Cash of Rs. 5,93,700/- found from G-8 Ratan Sagar, is not premise belonging to this assessee:- The ld. AO treated the whole cash found i.e. Rs. 5,93,700/- from G-8, Ratan Sagar as belonging to assessee. It is relevant to mention here that the premises "G-8, Ratan Sagar, MSB Ka Rasta, Johari Bazar, Jaipur does not belong to the assessee. This premise belong to another sister concern of assessee "M/s The Cargo Company". The copy of impounding order prepared by the survey party for this premises is at PB Page No. 24-28. In the assessment order the ld. AO treated the cash amounting to Rs. 5,93,700/- found from this premises belonging to the assessee while as per search statement of director of assessee (as quoted by ld. AO at page 3 of the assessment order) that out of total cash amounting to Rs. 5,93,700/- found from this premises only cash amounting to Rs. 1,50,000/- pert....
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....enue authorities. Before we decide the merit of this ground, it is necessary and imperative to analyze the order passed by the ld. CIT(A). While deciding this ground, the ld. CIT(A) has dealt with this ground in para 6 to para 8 of the impugned order, however, the operative portion is contained in para 8 of his order which is reproduced below. ''8. With respect to addition of Rs. 3,51,470/-, the AO has given credit for the cash as per books including claim of Rs. 50 lakhs stolen from the premises. The submissions made by the ld.AR that it belongs to 3rd party, belong to temple in the building and being kept by partner is devoid of merit as nothing like this was stated during the course of search or before the AO. On the facts and in the circumstances of the case, the addition of Rs. 3,51,470/- is confirmed. Appellant's Ground No. 2 is dismissed.'' After having heard the parties at length and perusal of the facts of the case, we noted that total cash found as per books of account of the assessee is as under:- ''i) Total cash found During the course of assessment proceeding the cash amounting to Rs. 6,29,400/- pertaining to assessee was found following premises: - S.No Part....
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.... 3,51,470 The AO treated the whole cash found i.e. Rs. 5,93,700/- from G-8, Ratna Sagar, whereas it was categorically submitted by the assessee that the above premises does not belong to him and the same belongs to another sister concern of the assessee i.e. M/s. The Cargo Company. The copy of the impounding order prepared by the survey party for this premises is also placed on record at PB Page No. 24 to 28. However, the AO treated the cash of Rs. 5,93,700/- found from this premises belonging to the assessee whereas as per search statement of director of assessee a sum of Rs. 1.50 lacs out of sum of Rs. 5,93,700/- belongs to the assessee and according to this categorical statement the balance cash amounting to Rs. 4,43,700/- does not belong to the assessee. In our view, the assessee had discharged its primary onus to prove the source of cash found from its possession as explanation has categorically be given for the cash found from the premises of M/s. The Cargo which is at PBP pages 35 to 36. Therefore, the assessee cannot be put under the liability to explain the cash found from the premises which does not belong to the assessee. Even otherwise, the ld. CIT(A) had upheld the ....
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....as belongs to M/s. Adventure Global Tour LLP and also produced the cash book of the said concern to show the availability of cash with the said LLP. Once there is no incriminating material to show that the cash of Rs. 2,59,140/- found at 203, Ratna Sagar, MSB Ka Rasta, Johri Bazar belongs to the assessee and the said premises was not the business premises of the assessee and the assessee has explained the source of cash belongs to M/s. Adventure Global Tour LLP whose business premises is situated at 203, Ratna Sagar, MSB Ka Rasta, Johri Bazar, then in the absence of any contrary fact or material, the said explanation of the assessee cannot be brushed aside. Accordingly, in the facts and circumstances of the case, we are of the considered view that the assessee has discharged its onus in explaining the source of cash and the AO even failed to discharge his preliminary onus to establish that the cash found at a different premises not belonging to the assessee, belongs to the assessee. Thus the addition made by the AO is deleted.'' Keeping in view the facts of the present case as well as the decision of Coordinate Bench in the case of M/s. Jai Amarnath Associates vs DCIT (supra), we ....
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.... High Court in Triveni Engg. Works Ltd. v. CIT [1983] 144 ITR 732 (All.) (FB), wherein it has been held that interest on arrears of tax is compensatory in nature and not penal. This question has also been considered by this Court in Civil Appeal No. 830 of 1979 titled Saraya Sugar Mills (P.) Ltd. v. CIT decided on 29-2- 1996. In that view of the matter, the appeal is allowed and question Nos. 1 and 2 are answered in favour of the assessee and against the revenue." iii) The above principles can be applied to the interest expenses levied on account of delayed payment of TDS, therefore the same is allowable to the assessee. iv) Further Hon'ble ITAT Kolkata relying on the verdict of Hon'ble Apex Court (Supra) in the case of DCIT, Circle-3(1), Kolkata vs M/s Narayani Ispat Pvt vide ITA No. 2127/Kol/2014 held as under:- Thus, in our considered view, the principle laid down by the Hon'ble Supreme Court in the case of Bharat Commerce Industries Ltd. (supra) is not applicable in the instant facts of the case. Thus, we hold that the Assessing Officer in the instant case has wrongly applied the principle laid down by the Hon'ble Supreme Court in the case of Bharat Commerce Indus....