DEEPAK VERGHESE,CHENNAI vs. ITO NON CORPORATE WARD-15(1), CHENNAI

आदेश / O R D E R

PER INTURI RAMA RAO, ACCOUNTANT MEMBER

ITA No.1988/2019 :- 2 -:

‘’(1) The order of the learned CIT (A) is contrary to law and opposed to the facts of the case.

(2)The learned CIT (A) has erred in adding as unexplained credit amounting to Rs.15,00,000/-. The assessee had accounted for the cheque received but the same was not presented to the bank. This was shown under cheques deposited but not credited under the Bank reconciliation statement (BRS) for Rs.15,00,000/-. The entry has been reversed in the subsequent years. The fact remains that this cheque was not credited to the bank account of the appellant and therefore he did not receive the money at all. The details of the same has been furnished. The Learned CiT (A) has not considered the bank reconciliation statement. Even though the money was not received in the bank accounts the same has been taken as unexplained credit and the payment is also not reflected in the bank account of the donors IT return, the copies of the same were submitted. The addition is therefore unjustified and this to be deleted.

(3) For these reasons and for any other reasons that may be taken up at the time of hearing it is prayed that the order of the CIT (A) be set aside and relief as prayed for may be granted’’.

The brief facts of the case are as under: 3.

The appellant is an individual engaged in the business of real estate and consultancy. The return of income for the AY 2012-13 was filed on 31.07.2013 admitting total loss of �86,546/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Non Corporate Ward 15(1), Chennai vide order dated 12.03.2015 passed u/s. 143(3) of the Income Tax Act, 1961 (for short ‘the Act’) declaring total income of �14,38,578/-. While doing so, the ITA No.1988/2019 :- 3 -:

Assessing Officer made additions on several items which inter alia included unexplained credit of �15,00,000/-. During the course of assessment proceedings, the Assessing Officer found that there was increase in capital account of the assessee which was explained by way of gift from his father �1,15,62,000/-. Out of which �1,00,62,000/- stood explained before the Assessing Officer, as referred to balance of �15,00,000/- it was stated that though entries was made in the books of accounts actually the cheque was not encashed. The Assessing Officer treated this as unexplained cash credit and brought to tax.

Being aggrieved by the above addition, an appeal was 4. preferred before ld. CIT(A), who vide impugned order confirmed the addition.

Being aggrieved by the order of the ld. CIT(A), the appellant 5. is in appeal before us in the present appeal. When the matter was called for hearing, none appeared on behalf of the assessee.

On the other hand, the ld. Sr. Departmental Representative 6. placed reliance on the orders of lower authorities.

We heard the ld. Sr. Departmental Representative and 7. perused the material on record. The only issue involved in the ITA No.1988/2019 :- 4 -: present appeal relates to the addition of �15,00,000/- as unexplained cash credit. Admittedly, assessee offered an explanation that �15,00,000/- cheque received from his father was not encashed, though it was reflected in the books of accounts. No doubt, this entry is reversed in the subsequent year. The explanation offered by the assessee is not found to be false by the Assessing Officer and we do not see any reason as to why said explanation cannot be accepted, in the circumstances when the cheque was not encashed. Therefore, in our considered opinion, no addition is warranted. Thus, the appeal filed by the assessee is allowed.

Order pronounced on 11th day of October, 2019, at Chennai.