TMI Blog2020 (10) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... nexplained money u/s 69 A for the assessment year 2017-18. Hence, it needs to be considered as to whether for the period between 01.04.2016 to 25.04.2016, possession of these notes have any intrinsic value or not. On this issue, we are guided by the judgment of Hon ble High Court of Karnataka in the case of CIT Vs Andhra Pradesh Yarns Combines Pvt. Ltd. [ 2006 (1) TMI 66 - KARNATAKA HIGH COURT ] Locker was last operated on 29.10.2015. The fact that the locker has not been operated in the assessment year 2017 -18 is before the revenue authorities. Hence, the amount deemed to have been undisclosed income for the assessment year 2016-17 whereas the amount has been brought to tax for the assessment year 2017 -18. Hence, the addition made in the AY 2017-18 cannot be upheld. Appeal of the assessee is allowed. - ITA No. 8005/Del/2019 - - - Dated:- 26-10-2020 - Sh. K. N. Chary, Judicial Member And Dr. B. R. R. Kumar, Accountant Member For the Assessee : Sh. Raj Kumar Gupta, CA For the Revenue : Sh. H. K. Choudhary, CIT DR ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: The present appeal has been filed by the assessee against the order of the ld. CIT(A)-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clients. The assessee then deposed that cash was belonging to FY 2015-16 and received from 25-30 separate clients for which no receipt /acknowledgement was issued. During the assessment proceedings the assessee was asked to explain the source of cash seizure of ₹ 17,61,950 /-. The assessee submitted that he was not in stable state of mind and had under pressure admitted that amount was his unaccounted money as his statement recorded at the time of search action was under coercion, threats and severe pressure. The assessee submitted that cash seized was indeed cash in hand of the assessee and his wife. 4. However, the AO found that the same was not disclosed during the search. The spouse of the assessee did not disclose as to where her cash in hand lies. The AO held that perusal of books of the assessee and his wife revealed that unsecured loan in books of the wife of the assessee was not reflected in books of the assessee. Hence, the AO concluded that the books of accounts of the assessee are not reliable and explanation furnished by the assessee was not acceptable. Accordingly, cash found at the premises of the assessee remained unexplained and the same was added to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8. On the other hand, the ld. CIT DR strongly argued on various provisions of Section 69A of the IT Act, the arguments are as under: 1. As per the Section 69A since the assessee is found to be the owner of the money and such money is not recorded in the books of accounts, the cash found on 07.04. 2016 has been rightly added in the assessment year 2017-18. 2. The assessee being a practicing advocate cannot claim any threat or coercion on the date of search with regard to recording of the statement. He relied on the judgment of the Hon ble Apex Court in the case of Banna Lal Jaat Construction Pvt. Ltd. Vs ACIT SLP No. 7469 of 2019 and other judgments which have been duly produced, which are on the issue of recording of the statement. 3. With respect to assessment of these amounts in assessment year 2016-17, it was argued that though the amounts may be claimed to have been received in the AY 2016-17 but since they have been found in the AY 2017-18, the provisions of the Act mandates the revenue to consider the assessment in the current year and the AO was correct in making the addition in the AY 2017-18. 4. Regarding the rejection of books of accounts, it was argued t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,867 /- as on 31.03.2015 as per the balance sheet. The cash book, opening balance as on 01.04.2015 was ₹ 8,98,866 /- and the closing balance as on 31.03.2016 was ₹ 9,88,227 /- out of which amount of ₹ 9,80,000/- has been seized by the department on 08. 04.2016. The balance sheet of Ms. Shalini Chawla as on 31.03.2016 reflects an amount of ₹ 9,88,228 /-. From the perusal of the details filed before the revenue it can be held that the amounts have been duly reflected in the books of accounts of the assessee and his wife. 15. The AO held that perusal of the books of accounts of the assessee and his wife reveals that unsecured loans in the books of accounts of the wife of the assessee is not reflected in books of the assessee. Hence, the AO rejected the books of accounts. For the sake of ready reference, the relevant portion of the assessment order is reproduced below: The assessee submits that cash seized was cash in hand of the assessee and his wife. However, the same was not disclosed during the search. Spouse of the assessee did not disclose as to where her cash in hand lies. Also a perusal of books of the assessee and his wife reveals, that unsecu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ularly followed by the assessee; or (c) Accounting Standards as notified by the Central Government have not been regularly followed by the assessee. 19. In order to invoke one of the other parameters for rejection of books of account in a particular case, then a definite reason to be mentioned is sine-qua non on part of the Assessing Officer before rejection of books of accounts. 20. The Assessing Officer is required to analyze various other heads and details for the relevant period, before drawing any conclusion on rejection of books of accounts. Therefore, the Courts expect that the Assessing Officer shall bring on record specific defects in the books of account of the assessee before invoking the provisions of Section 145(3). The rejections of books of account simply without mentioning the reasons would not suffice and cannot stand the test of appeal. 21. In rejecting the books of accounts of the assessee there shall be justification for the same. In the instant case, the two observations made by the Assessing Officer cannot be said to be justifiable reasons to reject the books of accounts. Further, in case where the books of accounts are rejected u/ s 145(3) then th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year and this amount was added to the return of income filed by the assessee while completing the assessments for the asst. yr. 1978-79. The assessment order so passed is accepted by the assessee, may be in view of smallness of the tax quantified by the ITO in spite of such addition. However, in the penalty proceedings, the assessee had contended that the addition made did not represent the concealed income, since on the date, when he was found 'to be in possession of the aforesaid amount, the same did not have any value in view of refusal by the RBI to honour the high denomination notes when it was tendered for exchange. In Tomlins Law Dictionary, ' money' is defined as, that metal, be it gold or silver, which receives authority by the prince s impress to be current; for as wax is not a seal without print, so metal is not money without impression. Money is said to be the common measure of all commerce, throughout the world, and consists principally of three parts, the material whereof it is made, being silver or gold; the denomination or intrinsic value, given by the king, by virtue of his prerogative; and the king s stamp thereon. It belongs to the king only, to put ..... X X X X Extracts X X X X X X X X Extracts X X X X
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