VANITA THADANI INDIVIDUAL,MUMBAI vs. ITO WD 20(3)(4), MUMBAI

The issue raised in this appeal is that the learned CIT(A) has erred in facts and in law in upholding addition of Rs.12,95,000 made by the Assessing Officer u/s 68 of the Income-tax Act ignoring the fact that assessee had withdrawn cash of Rs.14,51,300 from the bank on various dates and had re-deposited the same in the bank.

Before the learned CIT(A), the assessee submitted that assessee had taken loans by account payee cheques from friends and relatives on various dates amounting to Rs.19,32,300 and deposited all these cheques by bank. Out of these cheques, assessee had withdrawn Rs.14,51,300 on various

. Ms.Vanita Thadani. dates for personal use and property investment. It was further stated that when property deal was not mataralized and cash was not required for personal use, assessee had re-deposited an amount of Rs.12,95,000 out of cash balance. This explanation was not accepted by the Assessing Officer. The action of the Assessing Officer was confirmed by the learned CIT(A).

I have heard both the Counsel and perused records.

I find that the authorities below have not examined the issue properly. Assessee’s explanation of deposit can be considered only after examining the source of cash of those deposits. In this case assessee has claimed that the source of cash was unsecured loans from friends and relatives. This aspect has not at all examined by the authorities below. Hence, I remit this issue to the file of the Assessing Officer to consider the issue denovo after giving the assessee proper opportunity of being heard.

In the result, this appeal filed by the assessee stands allowed for statistical purposes.