TaxTMI 
TaxTMI 
2024 (12) TMI 817
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....oner of Income Tax, Central Circle-20, Delhi (hereinafter referred as 'Ld.AO') under section 143(3) of the Income Tax Act, 1961 [hereinafter referred to as "the Act"] for the Assessment Year 2019- 20. 2. Brief facts of the case are that a search & seizure operation under section 132 of the Act was conducted by the Investigation Wing on 01.11.2018 in Faquir Chand Lockers and Vaults Pvt. Ltd. group of cases. Assessee's Locker Nos. 122 & 125 were also covered under section 132(1) of the Act. The case was centralized to this Circle vide order dated 24.12.2020 under section 127 of the Act by learned PCIT (Central)-II, New Delhi. The assessee filed its return of income declaring income of Rs. 51,23,030/- on 26.10.2019. Notice under 143(2) of t....
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....ash sales in the month of October was also duly explained. Cash vouchers for sales were produced in that behalf to the AO. After failing to locate any deficiency or discrepancy the AO arbitrarily and unreasonably chose to ignore all material and evidence to embark on making the additions. 5.1 Without rejecting the books of accounts wherein the cash of Rs. 96,99,500/- stood incorporated, the AO added the relevant sum as an unexplained investment u/s. 69A of the Act. For so doing he reasoned that the increase in cash sales was not borne out from the past trends of business of the Appellant. He also stated that the unprecedented cash sales in the month of October of this year of nearly a crore was not in accordance with the pattern of month....
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....s made in a sum of Rs. 96,99,500/- for cash recovered from Locker No. 122 merits to be deleted - so it is prayed. 5.3 Other amount of cash recovered from Locker No. 125 in a sum of Rs. 1,72,00,000/- it is submitted that the same is an integral and indivisible part of the business transactions of the Appellant. This deposit was out of cash sales. That occurred with a pro tanto diminution in the value of stock of goods held in hand by the Appellant at the relevant time. Same had not been incorporated in the books of accounts due to pending clarifications. The entire amount, as was found in the locker therefore, could not have been put to tax. The cash represented sales collection. Those sales had been made at the cost of the diminution in ....
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....nder section 69A r.w.s 115BBE of the Act. Rs. 96,99,500/- recovered from Locker No.122 claimed to be part of books of accounts of the appellant/assessee for the year. The profit from which had been reported in the return of income, supporting evidence regarding the sale entries in the shape of cash book, ledger, sales invoice, sales register, stock register, sales tax returns etc. were submitted. Amount of Rs. 1,72,00,000/- claimed to be sale proceedings was not incorporated in the books of accounts due to pending clarification. The assessee claimed that the entire amount recovered from the two lockers was business income and could not be taxed under section 115BBE of the Act. Reliance was placed on the order of ITAT Delhi Benches in ITA No....
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....ewellery or other valuable articles is satisfactory, it cannot be treated as unexplained money under Section 69A of the Act. In the facts of the present appeal, there is nothing on record to suggest that assessee's explanation regarding the source of the income offered has either been doubted or disputed at the time of search and seizure operation or even during the assessment proceedings. Therefore, in our view, the income offered by the assessee cannot be treated as unexplained money under Section 69A of the Act. Therefore, as a natural corollary, section 115BBE of the Act would not be applicable. 9. Having held so, we may further add that a reading of section 115BBE of the Act makes it clear that the special rate of tax provided....