TaxTMI 
TaxTMI 
2025 (7) TMI 882
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....lo, who represented the matter before the first appellate authority and whose email id is also recorded in Form 35, was entrusted with the responsibility of filing the second appeal before the tribunal, buy unfortunately Mr Dullo, has suffered a multi organ failure and has been admitted to hospital in critical condition and as such the collection of necessary documents from the old counsel, took time. Subsequently, the assessee filed this appeal with the help of new counsel Mr. V.Agarwal, belated by 163 days, and he prays that since the delay was not intentional and there was no wilful neglect on the part of the assessee, the delay may please be condoned and the appeal may please be admitted to be heard on merits. 3. The Ld. DR has no objection. 3.1 Taking into consideration the medical issue of the CA, as stated in the affidavit, we condone the delay and admit the appeal to be heard on merits. 4. The grounds of appeal taken by assessee in form 36 are as follows: "1. The CIT(A); erred in confirming the addition of Rs. 700000/- made by the AO u/s 69A on account of cash found/ seized during the requisition u/s 132A on 03.12.2018. The order passed by the CIT(A)is con....
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....s business ( Paper book page 28 ). 5.1 The assessee was intercepted on 17th September, 2018, by the police authorities at Jammu, and was found to be in possession of cash amounting to Rs. 7 lakhs (seven lakhs), and on failure of the assessee to explain its source to the satisfaction of the police, the income tax department was informed and the said amount was seized by the income tax authorities, after following necessary procedure u/s 132A of the Act 61. 5.2 Subsequently, proceedings were initiated u/s 153A of the Act, for the Asst years 2013-14 to AY 2018-19 and the assessee filed returns for all the above assessment years declaring income on presumptive basis from mutton business, under the provisions of section 44AD of the Act 61, which were all assessed in scrutiny proceedings vide orders passed u/s 153A/ 143(3) of the Act ( copies of assessment orders are part of the PB filed page 30 to 45 ). 5.3 Return of income filed for asst year 2019-20 ( year under appeal ), was filed declaring income on presumptive basis u/s 44AD of the Act, and in course of hearing u/s 143(2) it was explained that the source of cash amounting to Rs. 7,00,000/- ( seven lakhs) on the date of sei....
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....reference: "5.1.3 The submissions of the assesses, documents/affidavits submitted by the AR during the course of appellate proceedings and the report submitted by the AO during remand proceedings have also been considered. It is pertinent to mention here that the assessee was not able to prove that the source of Rs 5,50,000/- was the sale proceeds since the assessee does not maintain books of accounts and the assessee has neither produced any bills/vouchers nor any other documentary evidence to substantiate his claim. Also, regarding the plea of amount of Rs 1,50,000/- was advanced from a customer for sale in future, the assessee had not been able to furnish 'any documentary evidence whatsoever, to substantiate his claim. It is also relevant to mention here that the assessee has failed to furnish any verifiable statement in this regard except relying on his earlier submissions. Thus, the plea of the assessee that the cash of Rs. 7,00,000/ found from his possession was his collection of business proceeds from Srinagar/ Kashmir is not true and correct and not based on facts. Further, the submissions/affidavits of the Appellant were sent to the AO in the....
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....vidence to establish the nexus between the cash found and business. Also bring out a clear legal position that for any income to be treated as business income, the nexus/the source, has to be established. Hence, the action of the AO in applying the rate as prescribed u/s 115BBE on the cash amounting to Rs. 7,00,000/-, treated by the AO as income u/s 69A in the assessment order, is found sustainable. Keeping in view the above facts and discussion, it is held that the amount of Rs. 7,00,000/- on account of cash intercepted and handed over to Income Tax Department is deemed income u/s 69A and has to be taxed as per provisions of Section 115BBE of the Income Tax Act, 1961 and the same is confirmed to the above extent. Further, the plea regarding the return of income has been filed u/s 44AD of the Act on presumptive basis, and the assessee does not maintain books of account, the section does not apply since the section presupposes the existence of books of account. In this ground, it is relevant to mention here that the cash of Rs. 7,00,000/- found and seized from the assessee, remained unexplained during the course of assessment proceedings as the explanation....
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....are as follows: Assessment Year Turnover 44AD Profit AY 2018-19 41,2,4000 33000 AY 2017-18 37,26,000 2,98,100 AY 2016-17 30,56,000 24,45,00 AY 2015-16 27,85,640 22,2870 AY 2014-15 22,50,680 1,80,100 AY 2013-14 20,56,000 16,4540 10.1 Thereafter, the Ld. AR referred to the hard copy of the ITR - 4 (presumptive return ) for the Asst year 2018-19 ( placed in pb page 2 to 10 ) and drew attention of the Bench specifically to page - 6 of the pb, where the closing cash balance as on 31st March, 2018, is reflected at Rs. 6,18,500/- ( in serial no - E-22 of the return ), which supports the contention of the assessee that at the beginning of the year as on 1st April 2018, the assessee had the cash balance, which is also a part of the business cash at the beginning of the year, and the same is accepted by the AO in scrutiny proceedings u/s 143(3) without a noise. 10.2 The Ld. AR also referred to the bank statement ( pb page 25-27 J & K bank A/c no. 0049 ) to submit that the bank account has been newly opened on 11th October, 2018, post seizure, and in absence of any bank account previously, no advance from Mr Nazir Ahmed coul....
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....gible business by the assessee, as per provisions of section 44AD of the Act 61, is proved beyond doubt which is duly supported by registration certificate issued by the Dept of Health and Medical Education, Govt of Jammu and Kashmir under FSSAI Act 2006, dated 20th October, 2018, in favour of the assessee carrying on business of wholesaler " Sheep and Goat " and also evidenced by the certificate issued to the assessee by the " All Kashmir Wholesale Mutton Dealer Union " ( pb page 28 ), and declaration of income on presumptive basis has also been accepted by the AO in scrutiny proceedings for all earlier years as evidenced by the copies of the assessment orders ( contained in the paper book ) and the total turnover disclosed by the assessee for the year under appeal in ITR - 4, being Rs. 28.90 lakhs, accepted by the AO, is also to be considered for determining the availability of cash holding of Rs. 7 lakhs, on the particular day of interception, because the same is also a part of the sale proceeds for the period April to September, declared in the return. 11.1 He further submitted that it is to be understood that this is a case of no books of accounts and section 44AA are not a....
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....under appeal cannot be accepted u/s 44AD. On this issue we refer to the judgment of the Hon'ble Allahabad High Court in the case of Samsung India Electronics Pvt. Ltd. vs. State of U.P. and [W.T. No. 660/2023] where the Hon'ble High Court has observed that maintaining consistency is very crucial in tax regime, particularly when dealing with similar factual scenario across different tax periods categorically stating that the department should adopt uniform positions in such cases. 13.2 Moreover, it is also observed by us as discussed in the earlier paragraphs that the brought forward cash balance available with the assessee as at the beginning of the year amounting to Rs. 6,18,500/- cannot be ignored and considering the fact that the assessee also has the benefit of opening inventories of Rs. 1,30,000/- at the beginning of the year, both taken together alongwith the daily sales generated for the period April to 17th September is sufficient to explain the availability of cash of Rs. 7 lac on the date of interception on 17th September 2018. 13.3 Moreover, in cases of presumptive taxation, when return is submitted u/s 44AD of the Act, proof of existence of eligible business is ma....