S. KIRAN KUMAR,BANGALORE vs. I.T.O., BANGALORE

Grievance raised by assessee through its grounds 2 to 4 is regarding addition of Rs.37,88,190/- sustained by the CIT (A).

Facts apropos are that assessee in receipt of rental income, brokerage and commission had disclosed such income at Rs.2,97,495/- in its return for the impugned assessment year. During the course of assessment proceedings based on AIR information, AO required the assessee to explain the source for deposits of Rs.86,03,840/- in his bank accounts. Submission of the assessee was that he had raised a loan of Rs.66,00,000/- from Andhra Bank, for doing real estate business but could not do so. As per the assessee, said amount was deposited to his SB account. AO was not impressed by the reply. According to him, out of the total deposits of Rs.86,03,940/-, 25% had to be considered as unexplained cash credit. An addition of Rs.21,50,985/- was made.

Aggrieved assessee moved in appeal before the CIT (A). Argument of the assessee was that during financial year 2007-08 which is the immediately preceding previous year, he had withdrawals of Rs.1,40,44,640/- from his bank accounts against cash deposits of Rs.1,03,06,450/-. As per the assessee on account of this, he was having a surplus cash of Rs.37,88,190/- with him at the end of financial year 2007- 08. Contention of the assessee was that the difference between the loan used for making the deposit and the actual deposits stood explained by the ITA.731/Bang/2015 Page - 3 opening surplus cash available with him. However, CIT (A) was not impressed. According to him, bank statement of the assessee for F. Y. 2007-08 which was produced before him reflected repeated cash withdrawals which was not normal. According to CIT (A), when cash was available, a person would not have made further cash withdrawals and accumulated cash at home. Further as per the CIT (A) one of the withdrawals was of Rs.6,03,140/- and this was an odd amount. According to him, claim of the assessee that he had opening cash balance of Rs.37,88,190/- could not be believed. He confirmed the addition made by the AO.

Now before us, Ld. AR strongly assailing the order of lower authorities submitted that opening cash balance was disbelieved for no specific reason. According to him, assessee had many reasons for withdrawing cash and keeping it with him. He was on the look out for properties for doing real estate business.

Per contra, Ld. DR submitted that it was not probable for a person to keep on withdrawing cash from his bank account and store it up in his home. Thus according to him, addition was rightly done by the AO.

In the result, appeal of the assessee is allowed.