SRI GOSBAL MADHU SUDHANA,HOSAPETE vs. THE INCOME TAX OFFICER, WARD - 1, HOSAPETE

The assessee is aggrieved by the decision of ld CIT(A) in confirming the addition relating to unexplained cash deposits made in the bank account of the assessee.

The ld counsel for the assessee submitted that the AO has made the addition of cash deposits made into various bank accounts viz., Canara Bank, Axis Bank, Sidharath Sahakari Sangha Niyamitha Co-operative Bank Ltd. ld AR submitted that the assessee is maintaining books of accounts and all these bank accounts have been duly disclosed in the books of account. Accordingly he submitted that the deposits have been made into these bank accounts out of the balances available in the books. He further submitted that the AO has accepted the books of account and did not reject the same. Under the circumstances the ld AR submitted that the AO was not justified in making this addition without considering the books of account of the assessee. He further submitted that the ld CIT(A) has also not appreciated these facts and accordingly he has confirmed the addition made by the AO.

On the contrary the ld DR submitted that the assessee has not explained the sources of deposits and hence the tax authorities have made the addition.

I have heard the rival contentions and perused the record. The balance sheet of the assessee is placed at page 70 of the paper book and a perusal of the same would show that bank accounts maintained with above said 4 banks are duly disclosed in the balance sheet, meaning thereby, all these banks accounts are available in the books of account. In that case the sources of deposits made into bank account shall be available in the books of account itself. It is the contentions of the assessee that AO has not rejected the books of account, in which case, the sources of deposits made into the bank accounts would stand explained by the entries made in the books of account. Accordingly I find merit in the contentions of the assessee. However, I am of the view that the books accounts of the assessee and the bank accounts accounted therein needs to be examined at the end of AO . Accordingly I restore this issue to the file of the AO with a direction to examine the books of accounts and after satisfying himself that deposits made into bank account are duly recorded the books of account, I direct the AO to delete impugned additions.

In the result, appeal filed by the assessee is treated as allowed for statistical purpose.