SARVESH JAIN,GURGAON vs. ITO, WARD- 4(1), GURGAON

The only grievance of the assessee is that the CIT(A) erred in confirming the addition of Rs.3,05,610/-.

Briefly stated the facts of the case are that during the course of scrutiny assessment proceedings the Assessing Officer noticed the cash deposits in the bank account of the assessee. The Assessing Officer found that the assessee has been depositing cash in his bank account and thereafter he is transferring the same to LIC companies. However, the Assessing Officer noticed that cash of Rs.827450/- was not remitted / transferred to LIC companies. He accordingly made the addition of Rs.827450/-.

The assessee carried the matter before the CIT(A) and furnished the cash flow statement explaining the cash deposit in the bank account, the CIT(A) was convinced with the source of deposit to the extent of Rs.5,21,820/-and confirmed the balance of Rs.305,610/-.

Before me the counsel submitted that this amount is nothing but opening cash in hand as explained in the balance sheet of the assessee. It is the say of the counsel that assessee is maintaining regular books of accounts and therefore, opening cash in hand should have been considered. The DR pointed out that opening cash in hand is Rs.305010/- whereas the additions sustained by the CIT(A) is Rs.305,610/-

I have carefully gone through the orders of the authorities below. There is no dispute that the assessee is maintaining regular books of accounts. It is also not in dispute that in the balance sheet for year ending 31.03.2013, the cash in hand is Rs.305,010/-. The disputed amount is Rs.3,05,610/-. In my considered opinion this must have come out from the opening cash in hand which explain the cash deposited in the savings bank account. I accordingly set aside the findings of the CIT(A) and direct the Assessing Officer to delete the addition.

In the result, the appeal is filed by the assessee is allowed.