TaxTMI 
TaxTMI 
2021 (2) TMI 218
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....did not follow the provisions of section 34 of evidence act. (a) As Ld. AO has rejected the books of accounts of the assessee though it was regularly kept in the course of business, or (b) Without issuing any show cause notice for rejecting the books of accounts, or (c) Without mentioning the reasons of rejection of books of account in the notices, 3. The Ld. CIT(A) has grossly erred in law and facts in confirming the assessment order as framed by Ld. AO who made huge addition without issuing show cause notice for mentioning specific defects/reasons therefore it hurts fundamental rights of the assessee of 'Opportunity of being heard'. 4. The Ld. CIT(A) has grossly erred in law and facts in confirming the assessment order as framed by Ld. AO who invoked section 68 of the act and made an addition under such section as undisclosed income while right from beginning assessee himself claiming that the Questioned Cash pertained to his Business and part of his day to day business transaction therefore nothing was undisclosed at the time of initiation of this assessment proceedings. 5. The Ld. CIT (A) as well as Ld. AO has grossl....
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....016. A search was conducted on 29.10.2016 in the case of Shri Nand Lal Joshi and Shri Nand Lal Pandya Group, Jaipur to which the assessee belongs. Cash of Rs. 5,34,000/- were found and seized as per annexure prepared during the course of search. Shri Om Prakash Karnani also in his statement dated 26.10.2016 recorded u/s 131 of the I.T. Act, 1961 has also admitted that the aforesaid cash belongs to him. During the assessment proceeding, a show-cause vide letter dt. 06/10/2018 was issued to the assessee to explain the source of cash seized. After considering the submission of the assessee, the Assessing Officer held as under:- "9. The assessee is trying to justify the cash of Rs. 5,34,000/- seized by the Police Authority from his proprietorship concern M/s Vinayak Enterprises. In support of his claim he furnished copy of his bank account and cash book of M/s Vinayak Enterprises. He claimed the cash from the cash sales from M/s Vinayak Enterprises. The cash book furnished by him showing opening cash balance of Rs. 5,95,790/- for which no supporting evidence has been produced. Thereafter, the cash book reflecting cash sales but the assessee failed to produced any supporting ev....
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....nk. The matter is triggered with a Search and Seizer proceedings as conducted by Police Thana Shastri Nagar under their territorial jurisdiction upon Nand Lal Joshi and Nand Lal Pandya two persons, who were carrying cash of Rs. 5,34,000/- from assessee's shop M/s Vinayak Enterprises situated at F-1, Jai Matadi Complex, Sikar House, Jaipur dated 21.10.2016. After having intimation of such proceeding, the Income Tax department had taken the statement of such persons under section 131 of Income Tax Act, 1961 on 22.10.2016 of Nand Lal Joshi and of Nand Lal Pandya. In order to verify the answer of Nand Lal Joshi as stated in Question No. 3 and 4 of such statement and Question No. 4 & 5 in case of Nand Lal Pandya the Income Tax Department had taken the statement of Om Prakash Karnani on 26.10.2016 and of Rajendra Prasad Karnani on 27.10.2016 and after having assured the facts and circumstances requisition had been issued and panchnama had been submitted by the Income Tax Department on dated 29.10.2016 in the name of Nand Lal Joshi and Nand Lal Pandya. 5. In support of aforementioned statements as given under section 131, Nand Lal Joshi, Nand Lal Pandya, Rajendra Prasad Karnani and Om ....
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....t, reliance was placed on decision of Co-ordinate Bench's in the matter of Sh. Navrattan Kothari Vs. ACIT (425/JP/17 Dt. 31.12.2017). 7. It was further submitted that the books of accounts which are kept in regular course of business should be treated as an evidence. We would like to quote the provision of Section 34 of Evidence Act; "34. Entries in books of accounts including those maintained in an electronic form], when relevant. [Entries in books of accounts, including those maintained in an electronic form], regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability." 8. It is very much appreciable that the questioned Cash of Rs. 5,34,000/- was sufficiently mentioned in Cash books as being maintained regularly during the course of day to day business transaction and submitted before each and every stage of proceedings viz. Investigation Wing on dated 02.11.2016, during the course of assessment proceedings and before Ld. CIT(A) during first appeal, ignoring their authenticity and relevant provision of Evidence Act t....
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....trengthening the opening cash balance of Rs. 595790/-. It is also important to mention here the Ld. AO did not dispute this document which is clearly indication of acceptance at his level. (d) It is also important to mention here that the Ld. AO has made six assessment preceding to the previous year pertained to the AY 2017-18, under which during assessment proceeding of AY 2016-17 he has accepted all the Financial statement and computation of income which was submitted by the assessee and which is explicitly mentioned Cash in hand as on 31.03.2016 a sum of Rs. 5,95,790/-. (e) The Cash Balance of the assessee as shown by him in his Income Tax Return as well as in statement of affairs in last seven years are being tabulated here which shows the previous pattern of the assessee for maintaining cash balance; Assessment Year ITR Filing Date PB-1 Page No. Key Details of statement of affairs Capital Cash Other Assets Remark 2011-12 24.03.2012 99-102 994511 106876 887635 # 2012-13 17.08.2012 108-112 1127918 64358 1063560 # 2013-14 21.07.2013 118-122 1304542 491254 813288 # 2014-1....
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....ined and supported in favor of assessee in a landmark judgment OF HONORABLE APEX COURT in the matter of M/s MEHTA PARIKH AND COMPANY VS. THE COMMISSIONER OF INCOME TAX 1956 AIR 556, 1956 SCR 626." 11. Per contra, the DR submitted that during the course of assessment proceedings, the specific notice was issued u/s 142(1) dated 06.10.2018 wherein the assessee was asked to furnish justification of cash amounting to Rs. 5,34,000/- seized from the possession of Sh. Nand Lal Joshi and Sh. Nand Lal Pandya which undisputedly belongs to the assessee. However, since the assessee failed to submit appropriate explanation along with documentary evidence, the addition was made by the Assessing Officer u/s 69A of the Act which has been rightly confirmed by the ld. CIT(A). He accordingly supported the findings of the lower authorities. 12. We have heard the rival submissions and pursued the material available on record. Undisputedly, the cash amounting to Rs. 5,34,000/- seized from the possession of Sh. Nand Lal Joshi and Sh. Nand Lal Pandya belongs to the assessee. The limited question therefore is source of such cash found and seized from the possession of these two persons which belongs t....