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Income Tax Appellate Tribunal, DELHI BENCH, ‘SMC’: NEW DELHI
order dated 26.08.2019 of the Commissioner of Income Tax (Appeals)-15, New Delhi [hereinafter referred to as ‘CIT(A)’] pertaining to AY 2012-13.
The sole issue involved in this appeal is relating to the cash deposits of Rs.22.82 lakhs in the bank account of the assessee. The claim of the assessee has been that the said amount is out of sales made by the assessee of the artificial jewellery. To prove this fact, the ld. Counsel for the assessee produced bills and vouchers before the lower authorities.
However, both the lower authorities did not get satisfied with the above evidence furnished by the assessee. The Assessing Officer as well as the Ld. CIT(A) doubted the genuineness of the bills and vouchers produced before them by the assessee. The Assessing Officer, therefore, added 1% of the total cash deposits as unexplained income of the assessee. However, the Ld. CIT(A) enhanced the addition and made the addition of the entire cash deposits into the income of the assessee.
Before this Tribunal, the ld. Counsel for the assessee has submitted that though the assessee has genuinely proved that the aforesaid cash deposits were out of sale proceeds of the artificial jewellery. However, he has further submitted that even otherwise as per the cash flow statement, there was opening balance of Rs.14,06,705/- which cannot be added as income of the assessee for the year under consideration. Apart from this, he has submitted that even during the year, there were deposits and corresponding withdrawals and that it has been held time and again that under such circumstances, the peak credit is required to be added.
The ld. DR, on the other hand, has relied upon the finding of the Ld. CIT(A).
I have considered the rival contentions of the parties and gone through the record. Prima facie, I find merit in the argument of the ld. Counsel for the assessee that the opening balance which was in fact the closing balance of the last year cannot be added as income of the assessee for the assessment year under consideration. The assessee has also claimed that there were deposits and corresponding withdrawals. In view of this submission, I am of the view, that the matter is required to examine at the hands of the Assessing Officer.
In view of this, the impugned order of the Ld. CIT(A) is set aside and the matter is restored to the file of the Assessing Officer with a direction that the Assessing Officer will examine the cash deposits/cash flow statement of the assessee and if the contention of the assessee is found to be correct then the Assessing Officer will not add the opening balance and so far as the cash and corresponding withdrawals for the year under consideration are concerned, the Assessing Officer will add the peak credit only. With the above observation, the appeal of the assessee is treated as partly allowed for statistical purpose.
In the result, the appeal filed by the assessee is treated as partly allowed for statistical purpose.
Order pronounced in the open Court on 22.06.2022.