INCOME TAX ACT, 1961

Section 132

Search and seizure - Addition of cash found during the course of search and seizure action under section 132 - Cash allegedly belonged to a trust of which assessee was president -

Revenue authorities made addition for cash found during the course of search and seizure action under section 132. Assessee contended that cash (Rs. 10.00 lakh) belonged to one of the trusts, in which assessee was president. Case of assessee was that he was arranging Kashi Yatra for the poor senior citizens of the locality and for that purposes cash was collected and was kept at his residence. Held: Assessee tried to find an escape route by submitting resignation to the trust of which he was president and further placed before AO a copy of letter of the trust refusing to hand over books for the purposes of perusal by the income-tax authorities. Contention of assessee that the factum of the existence of trust was established and thus, contention should be accepted, was without merit. Trust was existing or the trust gave some explanation was irrelevant insofar as the availability of cash of Rs. 10 lakhs with the assessee was concerned. The only relevant criteria to come out of the rigour of section 132(4A) was to establish to the satisfaction of AO that cash found from residence of the assessee belonged to the trust. Since primary factor of availability of cash remained unproved with the help of books of account of the trust, the other arguments about the existence of trust or tendering resignation, etc., pale into insignificance. Therefore, addition was confirmed.

REFERRED : National Thermal Power Company Ltd. v. CIT (1998) 229 ITR 383 (SC) : 1998 TaxPub(DT) 342 (SC)

FAVOUR : Against the assessee.

A.Y. : 2005-06

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