SHRI T. PSALMJEBRAJ,ARAKKONAM vs. ITO, VELLORE

This appeal by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals)-13, Chennai dated 14.07.2016 in and it pertains to assessment year 2011-12 passed u/s. 143(3) r.w.s. 147 of the Act.

The assessee has raised several grounds in his appeal, however the lone issue that survives for adjudication is that the Ld. CIT(A) has erroneously confirmed the order of the Ld. AO with respect to the addition made on account of bank deposits amounting to Rs.1,70,000/-.

The brief facts of the case are that the assessee is an individual engaged in religious activities such as conducting convention meetings, prayers, orchestra etc., on full time basis, filed his return of income on 05.03.2012 admitting total income of Rs.1,59,000/-. Initially, the return was processed u/s. 143(1) of the Act, however the file was taken up for scrutiny and finally assessment was completed on 31.03.2015 u/s. 143 r.w.s.

On appeal, the Ld. CIT(A) deleted the addition of Rs.3,46,000/- taking into account of the income return by the assessee during the earlier years and based on the cash flow statement filed by the assessee.

At the outset, I do not find any merit in the order of the Ld. CIT(A) on the issue of addition made on account of cash credit U/s.68 of the Act, because the Ld. CIT(A) had already accepted the fact that the assessee had opening cash balance of Rs.3,46,000/-. There is every possibility that the bank deposit of Rs.1,70,000/- could have been made from the opening cash balance of the assessee. Thus the source of cash deposit is explained. Hence, I’m of the view that the addition sustained by the Ld. CIT(A) for Rs.1,70,000/- is not warranted. Accordingly, I hereby direct the Ld. AO to delete the addition made for Rs.1,70,000/-.

In the result the appeal of the assessee stands allowed.