Income Tax Appellate Tribunal Lucknow Satish Chandra Pandey, Kanpur vs Department Of Income Tax IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH "B "B", LUCKNOW BEFORE HON'BLE SHRI H.L. KARWA AND HON'BLE SHRI N.K. SAINI ITA No.525/LKW/2010 Assessment Year:200102 Dy. CIT v. Shri Satish Chandra Pandey Central Circle 1, Kanpur 133/88M Block, Kidwai Nagar Kanpur PAN:ACJPP7982K (Appellant) (Respondent) Appellant by: Shri Vivek Mishra, D.R. Respondent by: Shri Amit Shukla, Advocate ORDER PER N.K. SAINI: This is an appeal filed by the Department against the order of the CIT(A)I, Kanpur dated 25.5.2010 for assessment year 200102. The following grounds have been raised in this appeal: 1. The CIT(A) erred in law in deleting the addition of $16,42,480 made by the Assessing Officer as unexplained cash credit u/s. 68 of the Act on a wrong appreciation of law and without any basis despite the clear finding to this effect by the Assessing Officer that the assessee has not discharged its onus as provided u/s. 68 of the Act. 2. The CIT(A) erred in deleting the addition by holding that Assessing Officer has not questioned the brought forward cash balance. The CIT(A) has thus ignored the basic provisions of section 68 of the Act, which casts the onus on the assessee to produce evidence to the satisfaction of the Assessing Officer and which was not done by the assessee. 3. The CIT(A) has erred in law in allowing loss of $1,26,820 despite the fact that no documentary evidences regarding the loss from M/s Arohi International were produced before the Assessing Officer during the course of assessment proceedings. :2: 4. That the order of the ld. CIT(A) being erroneous and on facts be vacated and the order of the Assessing Officer be restored. 5. That the appellant craves leave to amend anyone or more of the grounds of the appeal as stated above as and when need for doing so may arise. 6. The first issue vide grounds No.1 and 2 relates to the deletion of addition of $16,42,480 made by the Assessing Officer on account of unexplained cash credit. 7. The facts of the case in brief are that a search and seizure operation u/s. 132 of the Incometax Act, 1961 was carried out in Pandey Group of cases on 19.4.2006. In the said operation, residential premises of the assessee at 133/88M Block, Kidwai Nagar, Kanpur was covered. During the course of search and seizure operation, cash, jewellery, valuables, various books of account, documents and loose papers related to the assessee were found and seized. Consequent upon search, notice u/s. 153A of the Act was issued requiring the assessee to file his return of income. The assessee stated that the return filed on 21.1.2002 declaring total income at $3,52,701 may be treated as return in response to the said notice. In the original return, the assessee declared income as under: "Income from business : () $1,26,820 Income from other sources : $4,91,521 $3,64,701 Less: Exempt u/s. 80L : $12,000 Total income $3,52,701" 8. During the course of assessment proceedings, the Assessing Officer pointed out that the assessee had filed balance sheet and profit and loss account for the year ending on 31.3.2001. However, the assessee has not filed the capital account, profit and loss account as well as the balance sheet of the business concern, M/s Arohi International and it is not know what are the assets and liabilities of the above concern. The Assessing Officer pointed out that the cash flow statement was filed by the assessee wherein opening cash balance had been shown at $16,42,486. According to the Assessing Officer, there was no basis and evidence for the above cash balance. He :3: pointed out that every penny with the assessee is found deposited in the FDRs and/or are in the bank accounts and the assessee had claimed that the drawings for household expenses, PPF, purchase of arms and cash deposited in Punjab National Bank account totaling to $2,46,605 had been spent from opening balance only. The Assessing