NARESH KUMAR,BHIWANI vs. ITO, WARD-2, BHIWANI

The only issue in the appeal of the assessee whether the Assessing Officer is justified in making addition for Rs.29,86,510/- in respect of opening cash balance as income of the assessee for the year under consideration i.e. AY 2015-16.

Briefly stated the facts of the case are that in the course of assessment proceedings assessee was asked to explain about the opening cash balance of Rs.29,86,510/- appearing in the books of account. The 1

I.T.A.No.9028/Del/2019 assessee submitted that this opening cash balance is disclosed in the Income tax return for the AY 2014-15. However, the Assessing Officer seems to have downloaded the Income tax return for the AY 2014-15 and found that there is a zero closing cash balance as on 31.03.2014.

Assessee preferred appeal before the Ld. CIT(A) and the Ld. CIT(A) sustained the addition as the assessee did not reflect the figures of closing cash balance in the return filed for the AY 2014-15.

Before me the Ld. Counsel for the assessee submits that the Accountant who filed the return of income of the assessee inadvertently did not fill up the columns of financial particulars of the business in the return of income which was filed electronically. These particulars are sundry debtors, creditors, stock-in-trade and cash balance. None of these particulars were filled up in respective columns in the return by the Accountant inadvertently. An affidavit by Shri Sajjan Kumar Aggarwal from whose office the return of the assessee was filed was furnished deposing that the financial particulars of the business in the return were left blank inadvertently and it is a bonafide mistake.

The Ld. Counsel further submits that in any case in the course of assessment proceedings the assessee has filed Income tax return,

The Ld. Counsel further placing reliance on the decision of the Punjab & Haryana High Court in the case of CIT vs. Deepak Kumar in dated 08.03.2010 submits that assessee cannot be put into trouble and suffering on account of mistake committed by the Counsel.

Ld. DR strongly placed reliance on the orders of the authorities below.

Heard rival submissions, perused the orders of the authorities below and the decisions relied on.

From the letter dated 05.12.2017 which is placed at page 28 of the Paper Book it is seen that in the course of assessment proceedings the assessee has furnished Income tax return, computation and balance sheet for the AY 2014-15 before the Assessing Officer. From the computation of income for AY 2014-15 and the balance sheet as on 31.03.2014 which 3

The Hon’ble Punjab & Haryana High Court in the case of CIT vs. V.P. Singh held that when there is no dispute that the assessee has I.T.A.No.9028/Del/2019 submitted the balance sheet before the Assessing Officer and in the balance sheet the closing balance or cash in hand was disclosed the opening balance cannot be regarded to be undisclosed income. This decision is squarely applies to the facts of this case. In the case of the assessee also the Assessing Officer did not dispute the balance sheet and the computation filed by the assessee, wherein the closing cash balance of Rs.29,86,510/- was reflected by the assessee. The only grievance of the Assessing Officer for not accepting the cash balance is that the Income tax return for the AY 2014-15 the assessee has not filled up the financial data. This cannot be the reason for treating opening cash balance as unexplained income of the assessee.

In the circumstances, I direct the Assessing Officer to delete the addition made addition of Rs.29,86,510/- on account of opening capital.

In the result, appeal by the assessee is allowed.