INCOME TAX ACT, 1961

Section 153A

Search and seizure - Assessment under section 153A - Cash found during search -

A search was conducted at the bank locker of assessee and cash was found and seized. Consequent to search action, notice under section 153A was issued in respect of the assessment year 2009-10. After taking into account explanation of assessee in respect of the cash found that a sum had been withdrawn from bank account of HUF, AO held the balance sum of rupees found from locker was undisclosed income of assessee. CIT(A) sustained addition made by AO. Assessee submitted that search action in the bank locker was carried out on 9-9-2010 and, thus, any addition for cash found in locker could have been made only in the assessment year 2011-12 corresponding to the previous year 2010-11. But, AO had made addition in the current assessment year, which was assessment year 2009-10, and therefore, action of AO was not in accordance with law. Held: The date of search fell in previous year 2010-11 and the corresponding assessment year was 2011-12. There was nothing on record to show that the said cash found was out of any income earned by assessee. In absence of any explanation in respect of the cash found during the previous year corresponding to the assessment year 2011-12, the addition should have been made only in the assessment 2011-12 - and not in the relevant assessment year. Thus, order of lower authorities was set aside and directed AO to delete the addition.

Relied:National Thermal Power Company Ltd. v. CIT (1998) 229 ITR 383 (SC) : 1998 TaxPub(DT) 0342 (SC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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