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

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ITA 669/DEL/2018Status: DisposedITAT Delhi27 November 2018AY 2014-155 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the assessee maintained regular books of accounts and the disputed amount closely matched the opening cash in hand as per the balance sheet, the addition was unjustified. The CIT(A)'s findings were set aside.

What were the facts?

During scrutiny assessment, the Assessing Officer noticed cash deposits in the assessee's bank account which were then transferred to LIC companies. However, a portion of the cash was not remitted, leading to an addition. The assessee explained this as opening cash in hand.

What were the issues?

Whether the addition made by the Assessing Officer on account of unexplained cash deposits, which the assessee claimed as opening cash in hand, was justified.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: SH. N. K. BILLAIYA

Hearing: 26/11/2018Pronounced: 27/11/2018

This appeal by the assessee is preferred against the order of the CIT(A)-1, Gurgaon dated 16.11.2017 pertaining to A. Y. 2014-15.

2.

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

3.

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/-.

4.

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/-.

5.

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/-

6.

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.

7.

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

Order pronounced in the open court on 27.11.2018.

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