TaxTMI 
TaxTMI 
2024 (12) TMI 1685
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.... firm and engaged in the manufacturing and also trading of jewellery and diamonds. A search & seizure action took place at the premises of the assessee on 28.6.2019 relevant to financial year 2019-20 and assessment year 2020-21. During the course of search, cash of Rs. 40,58,450/- was found at the premises of the assessee, when the search team tallied unearthed cash with the cash balance as per the books of the assessee then it has come to the notice that only an amount of Rs. 5,93,448/- was present in the cash book and hence an amount of Rs. 34,65,000/- was found to be excess in the hands of the assessee. At the time of recording of statement, the assessee conceded that this cash is unaccounted cash and has been admitted as an additional i....
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....ew that excess cash found and seized during the search would have to be taxed as an additional business income of the assessee for the impugned year instead of section 69A of the Act. Similarly, the ld. CIT(A) has held that excess stock amounting to Rs. 1,38,36,083/- is to be taxed as business income u/s 68 of the Act instead of section 69A of the Act. 4. Aggrieved with the order of the ld. CIT(A), the revenue has come up in appeal. The ld. D.R. has made the following submissions: - a) The observation of the ld. CIT(A) that no specific notice with respect to the application of section 69A of the Act has ever been given to the assessee is factually incorrect. Ld. D.R. draws the attention of the bench towards notice issued u/s 142....
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....'ble Apex Court while dismissing the appeal of an assessee in the case of Roshan Lal Sanchiti 292 Taxman 549(SC) has held that statement recorded during the course of search u/s 132(4) has evidentiary value and if any of the party would like to deviate from such statement then such party has to rebut the disclosure with cogent material. Here in this case the revenue did not want to rely on the statement of the Mangging partner. However, the lower authorities have failed to bring on record any material to prove that the cash and additional stock was not the business income of the assessee. Further the AO has also not disturbed the audited books of the assessee. Now the moot question which we have to decide is whether this cash and unexplaine....
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....urce. Once stock to the extent of the surplus found at the date of survey, is included in the stock register, assessee has to give an explanation for the source from which it acquired such stock. Assessee having not passed any entry in financial books, addition of stock made by it, in its stock register, can only be considered as made out of undisclosed source" 7. The above finding of fact as has been recorded by the ITAT is not there in the present case as evident from the fact that the AO himself has treated the additional amount as income from business while computing the final income. Further coordinate Bench of Chennai in the case of Overseas Leathers Vs DCIT reported in 152 Taxman. Com 595 (Chennai) while distinguishing the decisio....