SRI. ASHOK DESING NAIK,VIJAYAPURA vs. INCOME-TAX OFFICER-WARD-1 & TPS, VIJAYAPURA

O R D E R

Per Shri A.K. Garodia, Accountant Member

by the assessee are as under. “1. The order of the authorities below is against the fact and circumstances of the case.

2. On the facts and circumstances of the case, the Assessing Officer erred in making the addition on account of unexplained cash deposits in the bank account amounting to Rs.31,79,134/-, as the appellant was having sufficient source of income to deposit the same in the bank account .

3. Without prejudice to the above Ground no.2, On the facts and circumstances of the case, the Assessing Officer erred in making the addition of Rs.31,79,134/- u/s 69A, instead of making the addition of G.P at the rate of 2.89% on unaccounted cash deposits amounting to Rs.18,70,883/- (Rs.4,09,92,430/- minus Rs.3,91,21,547/-), which is the actual unexplained cash deposits. The G.P on the same works out to Rs.54,068/-.

4. On the facts and circumstances of the case, the Hon'ble CIT(A) erred in sustaining the addition made by the Assessing Officer without appreciating the fact that unaccounted cash deposits emanates from the business should have been taxed at a G.P rate of 2.89%.

5. For these and other reasons which may be adduced at the time of hearing, this Hon'ble Bench is requested to delete the addition made by the Assessing Officer on account of cash deposit in the bank or pass such other order as this Hon'ble Bench may deem fit.

6. The appellant craves leaves, to add, to alter, to amend and to delete any other grounds at the time of hearing.” 3. It was submitted by ld. AR of assessee that as per the assessment order, the AO says that there were cash deposit in bank to the extent of Rs. 4,23,00,681/- including cash deposit in IDBI Bank, Vijayapur of Rs. 1,94,56,681/- and State Bank of India, Kannur of Rs. 2,28,44,000/-. Thereafter he submitted that the AO has allowed benefit to the assessee to the extent of sales disclosed by the assessee as per VAT returns to the extent of Rs. 3,91,21,547/- and made addition in respect of excess of cash deposit over sales. He submitted that there are two mistakes in the order of the AO. He submitted that the first mistake is this that the actual cash deposit by the assessee in the bank account with IDBI Bank noted by the AO at Rs. 1,94,56,681/- is incorrect. He submitted that assessee has deposited only Rs. 1,81,48,430/- with IDBI as against the amount noted by the AO of Rs. 1,94,56,681/-. In this regard, he submitted the copy of bank statement of IDBI Bank and date wise chart of cash deposit in IDBI Bank total of Rs. 1,81,48,430/-. 4. Regarding the second mistake he submitted that in addition to granting benefit of sales reported by the assessee in the present year, the AO should also have considered the opening cash balance. He submitted that the balance sheet of the assessee for the preceding year i.e. year ending as on 31.03.2014 is available on page no. 3 of the paper book and as per the same, there is closing cash balance as on 31.03.2014 of Rs. 38,58,600/-. At this juncture, the bench wanted to know regarding the closing cash balance as on 31.03.2015. He submitted a copy of balance sheet as on 31.03.2015 and pointed out that as per the same, the assessee has closing cash in hand of Rs. 13,00,087/- as on 31.03.2015. He submitted that the excess of opening cash in hand as on 01.04.2014 Rs. 38,58,600/- over closing cash in hand as on 31.03.2015 Rs. 13,00,087/- comes to Rs.

Page 3 of 5 25,58,513/- and it should also be considered as cash available for deposit in bank account. He submitted that if both these mistakes are taken into account then no addition is called for on this account.

Amo Date unt 1 02.04.2014 14,983 2 06.04.2014 37,000 24.05.2014 8,000 3 4 16.06.2014 6,000 26.06.2014 7,000 5 6 19.07.2014 12,564 7 09.09.2014 12,686 8 15.09.2014 12,686 9 29.09.2014 10,00,000 26.11.2014 3,500 10 06.12.2014 2,500 11 12 19.12.2014 8,785 13 26.12.2014 1,51,000 14 27.12.2014 4,500 15 16.01.2015 6,700 10,057 16 28.01.2015 17 12.02.2015 4,500 5,790 18 05.03.2015 13,08,251 Assessee 1,81,48,430 AO 1,94,56,681 SBI 2,28,44,000 4,09,92,430 Total cash Deposit 3,91,21,547 Sales 18,70,883 Excess Cash Deposit 25,58,513 Excess of opening cash