TMI Blog2005 (10) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... on because no account is normally kept for the exact denomination of notes available with a particular person. Therefore, in our opinion, if the cash is there with the assessee as per the books of account maintained and there is no other evidence that the same has been utilized elsewhere, no addition on that ground can be made in the hands of an assessee. We, therefore, hold that in the absence of any material that the cash shown in the cash book has been used by the assessee elsewhere and there was no possibility of that cash being available with the assessee, no addition can be made to the income of the assessee for some minor and insignificant variation about carrying the cash in specific denomination or about the timing of the person who carried the money for depositing in the bank. We, accordingly, delete the addition from the assessment of Anand Autoride Ltd. and the protective addition in the hands of Shri Shailesh M. Bhil and allow these two appeals on this ground. In the case of Anand Autoride Ltd., the other issue is for the addition of income for assessment years 1995-96 and 1996-97 on the ground that these returns have been filed late and another addition on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . While checking our bag, the police found cash of Rs. 10 lakhs belonging to our office which they seized since I could not produce any evidence in support of my claim. 3. The statement of Shri Manoj Brahmabhatt, the office manager of the assessee was recorded on 4-8-1996 by the police and he stated that ... The two persons caught by the police are our employees. I do not have any idea as to the source and destination of the seized cash. Our company's Director Shri Hemendra D. Shah can only explain from where this amount was brought and to where it was being taken . After the information to the Income-tax Department and when the ADIT, Investigation started his investigation, a letter was filed by the assessee-company stating as under:- ... On 3rd August, 1996, our two persons namely Shri Hitesh C. Shah and Shri Shailesh M. Bhil, were going to the bank for depositing the amount of Rs. 10 lakhs. On the way, they were intercepted by the police and the cash was taken in their custody. The said amount belongs to M/s. Anand Autorides Limited. We are enclosing a copy of the cash book of M/s. Anand Autorides Limited wherein the said cash balance has been noted. Since it was Saturday an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly asked to accompany Shri Hitesh C. Shah. An affidavit from Shri Hemendra D. Shah, director of the assessee was also filed claiming that the cash belonged to the assessee but the Assessing Officer stated that the assessee did not have any evidence to prove what was stated in the affidavit and particularly in the light of deposition by Shroff for exchange of notes and by its own employees. The three persons S/Shri Hitesh C. Shah, Shailesh M. Bhil and Manoj Brahmabhatt were produced before the Assessing Officer on 3rd November, 1998 and the Assessing Officer stated that their statements raise more questions on the alleged story about the exchange of currency, availability of such amount of cash in the books of the assessee and that there were numerous factual errors in the statements about the timing of departure from the office, handing over the cash, etc. In response to further enquiry, the assessee-company filed a letter dated 26th November, 1998 which is reproduced in the order of the Assessing Officer. The Assessing Officer did not accept the reply of the assessee and he observed as under:- The above reply of the assessee is not acceptable as the assessee has not responded to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 10 lakhs were men of no means. Shri Hitesh C. Shah was a peon drawing a salary of Rs. 1,200 per month. The other person Shri Shailesh M. Bhil just accompanied him without knowledge of any transaction. The transaction was owned up by the assessee by filing a letter and also by filing an affidavit of the director stating that the said amount belonged to Anand Autoride Ltd. and it was being carried for depositing in the bank. The two persons intercepted by the police had also confirmed that the money belonged to Anand Autoride Ltd. The question, therefore, remains as to what is the source available with the assessee Anand Autoride Ltd. for the said sum of Rs. 10 lakhs. The assessee has produced the cash book of Anand Autoride Ltd. wherein the said cash balance has been recorded. The cash book was showing a cash balance of Rs. 10,42,279.32 on 3-8-1996 when the two persons were intercepted by the police and seized the cash from them. This cash is coming forward as opening balance as on 1-4-1996 amounting to Rs. 10,39,934.32. In fact, the cash balance exceeding Rs. 10 lakhs was there right from 19-2-1996 when initially the assessee was having cash balance of Rs. 26,483.32 and a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is there with the assessee as per the books of account maintained and there is no other evidence that the same has been utilized elsewhere, no addition on that ground can be made in the hands of an assessee. The fact that the assessee could not explain as to why he retained so much cash with it for a long time cannot be a ground for rejecting the contention of the assessee for the availability of cash. There can be many reasons and the assessee had given some reasons that the amount was kept in cash for such a long period because it was contemplating a transaction of land and thinking itself to be in a better position to bargain if the assessee had cash available with it. We, therefore, hold that in the absence of any material that the cash shown in the cash book has been used by the assessee elsewhere and there was no possibility of that cash being available with the assessee, no addition can be made to the income of the assessee for some minor and insignificant variation about carrying the cash in specific denomination or about the timing of the person who carried the money for depositing in the bank. We, accordingly, delete the addition from the assessment of Anand Autoride Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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