RAKESH BABBAR,NEW DELHI vs. ACIT, CENTRAL CIRCLE- 2, NEW DELHI

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] - 23, New Delhi dated 30.08.2017 pertaining to assessment year 2015-16.

The solitary grievance raised by the assessee in this appeal is that the ld. CIT(A) erred in confirming the addition of Rs. 7 lakhs in respect of cash found during the course of search.

Briefly stated, the facts of the case are that search operation at the residence of the assessee was carried out on 10.03.2015. Rs. 11,50,000/- cash was found from the residence of the assessee. The assessee was asked to explain the source of cash of Rs. 11.50 lakhs.

In his statement, the assessee explained that Rs. 2.5 lakhs was received from Shri V.K. Sharma, Rs. 2 lakhs from his personal withdrawings from last 10 days, Rs. 2.5 lakhs were from savings for temple donation which has been accumulated from personal withdrawal and Rs. 3.5 lakhs belonged to his daughter Ms. Ankita Goyal, which has been accumulated from her gifts over a period of one year and remaining cash was from the kitty savings of his wife. The assessee also furnished copy of his cash book.

Not convinced with the reply of the assessee, the Assessing Officer made addition of Rs. 11.50 lakhs.

The assessee carried the matter before the ld. CIT(A) and reiterated his contentions.

After considering the facts and submissions, the ld. CIT(A) observed that the assessee was having cash balance of Rs. 2.72 lakhs as on 01.03.2015. The ld. CIT(A) was also convinced with the claim of Rs. 1 lakh each as expenditure in the hands of the appellant’s wife and daughter. The ld. CIT(A) was also convinced with the availability of cash of Rs. 2.50 lakhs from opening cash in hand and finally confirmed the addition of Rs. 7 lakhs.

Before us, the ld. AR vehemently stated that his prayer is limited to credit of Rs. 22,000 out of opening cash in hand which has been accepted by the ld. CIT(A).

Per contra, the ld. DR supported the findings of the ld. CIT(A).

We have carefully considered the underlying facts in issue. We find that the ld. CIT(A) has accepted the opening cash balance of Rs. 2.72 lakhs as on 01.03.2015 and simultaneously has given credit of Rs. 2.50 lakhs out of opening cash in hand. We fail to understand why there should be any quarrel in respect of Rs. 22,000/- as the same is also covered in the opening cash balance of Rs. 2.72 lakhs. We accordingly direct the Assessing Officer to give relief of Rs. 22,000/-.

In the result, the appeal of the assessee in is partly allowed.