Cash not recorded in books of accounts at time of search rightly added as unexplained money u/s 69A: ITAT

In the matter of Gardenia Aims Developers Pvt. Ltd v/s DCIT, Income Tax Appellate Tribunal (ITAT) said that when the amounts received in cash against the same transaction of sale of flats which have not been recorded in the books of account of the assessee at the time of search and seizure operation and subsequently recorded in the books as advance from customers is nothing but an eye wash to supplement the explanation of the assessee regarding the cash receipts.

Therefore in view of the foregoing, the tribunal held that the addition made by the AO deserves to be confirmed in the hands of the assessee u/s 69A of the Act.

Relevant Text:

10. In view of the above, submissions of the assessee submitted before the authorities below allegations of the AO and findings recorded by the ld CIT(A) in para 7.2 to 7.5. It is apparent that the assessee is engaged in construction of flats and trading in immovable property. The AO categorically noted that the receipts found and seized during the search operation was not recorded in the books of account of the assessee and in a case when there would be no search then the same could not be revealed or unearth to the department. The ld CIT(A) also noted that the assessee has included the amounts in the books of account subsequently and there is no appropriate explanation regarding treatment of the same as advance from customers. In view of the above factual findings recorded by the ld CIT(A) we are of the considered view that undisputedly the assessee entered the amounts of cash receipts in the books of account as advance from customers but in fact these amounts were on money receipt in cash against the sale of flats and never intended to be accounted for by the assessee in its books of account. Therefore, when the transactions of sale of flats have attained finality then it is obvious that all the amounts receipt by the assessee and recorded in the books of account of the assessee as advance from customers has to be set off and included in the turnover of the assessee. At the same time when the amounts received in cash against the same transaction of sale of flats which have not been recorded in the books of account of the assessee at the time of search and seizure operation and subsequently recorded in the books as advance from customers is nothing but an eye wash to supplement the explanation of the assessee regarding the cash receipts. We are unable to agree with the contention and submission of the assessee placed before the authorities below and at the same time we are inclined to agree with the findings recorded by the ld CIT(A) as noted above, while confirming the addition are correct but his findings towards change of charging section from 69A to 56 are not correct. Therefore in view of foregoing we are inclined to hold that the addition made by the AO deserves to be confirmed in the hands of the assessee u/s 69A of the Act. Accordingly, ground No. 1 of the assessee is also dismissed. 

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