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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM
The relevant order of the assessing officer in this regard may be gainfully referred as under:
Regarding the Cash Deposits as per AIR/GIB information, during the course of assessment proceedings assessee was asked to explain the source of cash deposit as well as Term Deposit totaling to Rs. 247484S/- in HDFC Bank Ltd during the F.Y. 2010-11 relevant to A.Y. 2011-12. In response, AR of the assessee vide letter dt. 02/02/2015 submitted as under: a. "Assessee has opening cash balance as on 01.04.2010 of Rs.977027/- b. Assessee is the partner in Navrang Studios(partnership firm) and her share of profit 28%. From the share of profit of the above firm assessee has withdrawn cash from bank on regular basis and redeposited in to Bank. "
Late Smt. Sushila Shyamsundar Seksaria However no supporting for opening cash balance of Rs.977027/- was submitted thereafter. Assessee's Capital/Current A/c. with partnership firm Navrang Studios submitted for the year 2010-11. It is noticed that no cash withdrawals from the firm was found. Only Bank withdrawals found in the firm's A/c. Assessee's Bank A/c. statement with HDFC Bank was submitted for the period 4-1-2010 to 31-3- 2011. Frequent cash withdrawals and deposit found in the account. Considering the cash withdrawals and deposits into the account negative cash balance worked out on following days :- On 28-7-2010 Rs.3730/- On 5-8-2010 Rs.291500/- On 01-11-2010 Rs.298600/- Total Negative cash Balance Rs.593830/- 5. As no satisfactory explanation was received from the assessee, total negative cash balance of Rs.593830/ was treated as unexplained cash credit u/s. 68 and added to the Returned Income/Penalty proceedings u/s. 271(l)(c) is initiated separately for furnishing inaccurate particulars of Income.
The ld. Commissioner of Income Tax (Appeals) has also upheld the assessing officer's action.
Upon careful consideration, I find that in this case the assessing officer has not accepted the opening cash balance of Rs.9,77,027/-. However, he has rejected only a sum of Rs.5,93,830/- which happens to be negative balance on three days which was computed by the assessing officer by not considering the aforesaid opening cash balance.
I find that firstly there is no cogent reason as to why the assessee cannot have the said opening balance of cash. It is not the case that assessing officer is rejecting the closing balance of cash for the present year. Furthermore, if the assessing officer was dissatisfied about the veracity of opening balance, the same should have been disallowed in entirety.
However, by disallowing only the negative cash balances so computed by him, the assessing officer is partly accepting the opening balance as well as partly rejecting it.
Late Smt. Sushila Shyamsundar Seksaria 7. In my considered opinion, in the facts and circumstances of the case, the action of the assessing officer confirmed by the ld. Commissioner of Income Tax (Appeals) is not sustainable. Accordingly, I set aside the orders of authorities below and decide the issue in favour of assessee.
In the result, this appeal by the assessee stands allowed. प�रणामतः �नधा�रती क� अपील �वीकृत क� जाती है ।
Order pronounced in the open court on 21.05.2018 Sd/- (Shamim Yahya) लेखा सद�य / Accountant Member मुंबई Mumbai; �दनांक Dated : 21.05.2018 व.�न.स./Roshani, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. आयकर आयु�त(अपील) / The CIT(A) 3. आयकर आयु�त / CIT - concerned 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard File 6. आदेशानुसार/ BY ORDER,