ITO, NEW DELHI vs. MR. RAJESH BANSAL, NEW DELHI

The brief facts of the case are that the return of income was filed declaring an income of Rs. 12,81,880/-. The case was later selected for scrutiny. During the course of assessment proceedings, the AO observed that the assessee had deposited cash on various dates in his following accounts :-

On the assessee being asked to explain, it was the assessee’s contention that he was working with M/s. Mining Associates Pvt. Ltd. in a senior position and the company had given the amount in cash for expenditure to be incurred on behalf of the company in cash. Since this expenditure was to be incurred in small amounts, it was deposited in cash by the assessee in his own bank accounts and was later withdrawn through ATMs and also spent through credit cards. The AO issued summons u/s 131 of the Act to the Company M/s. Mining Associates Pvt. Ltd. and required them to produce cash book, ledger account and other documents. Since no compliance was made by the company, the assessee’s explanation was not accepted and all the cash deposited was added to the income of the assessee.

The assessee preferred an appeal before the Ld. CIT(A) and submitted before the Ld. CIT(A) that the transaction undertaken by the company was very huge and that it was not possible to obtain those documents from Asansol i.e. where the company was located. It was also submitted that the AO had accepted the assessee’s contention for assessment year 2009-10 on similar set of facts and no addition was made. Ld. CIT(A) noted that there was confirmatory letter from the concerned company and therefore proceeded to delete the addition.

At the outset an application for adjournment was put up before us on behalf of the Ld. Counsel for the assessee which we refused and proceeded with the hearing of the case.

Ld. DR submitted that summons u/s 131 of the Income Tax Act 1961 were issued to M/s. Mining Associates Pvt. Ltd., Asansol requiring them to furnish copy of cash book with complete narration for the period 1.4.2009 to 31.3.2010 along with copy of ledger account of the assessee and list of shareholders with complete addresses which were not produced. Ld. Sr. DR further submitted that the contention of the assessee that he had received cash on behalf of the company was not acceptable as the assessee had deposited cash of Rs. 25,20,000/- with ICICI Bank, Bandra Kurla Complex, Mumbai and Rs. 10,70,000/- with HDFC Bank I.P. Extension, Patparganj, New Delhi whereas the assessee was located in Delhi. It was also submitted that deletion had been made without referring the matter to the A.O. It was also submitted that the AO has given a finding that the accounts as required by the AO were not furnished either by the assessee or by the company M/s. Mining Associates Pvt. Ltd.. It was prayed that the addition deleted has been wrongly deleted and ,therefore, the order of the Ld. CIT(A) should be set aside.

We have heard Ld. Sr. DR and have also perused the material on record. A perusal of the impugned order shows that the Ld. CIT(A) has taken into account the written submissions of the assessee and copies of the bank accounts. He has also noted that M/s. Mining Associates Pvt. Ltd. was having bank account in the same premises where the assessee was maintaining the saving bank account jointly with his wife.

In the result the appeal of the department stands allowed for statistical purposes.