SWAPNA R. SAWANT,MUMBAI vs. ITO 18(2)(2), MUMBAI

The assessee is aggrieved by the decision of the learned CIT(A) in partially confirming the addition made by the Assessing Officer towards unexplained deposit made into the bank account.

We have heard the parties and perused the record. The Assessing Officer received AIR information to the effect that the assessee has deposited a sum of ` 19,80,600/- in aggregate in the savings bank account maintained with M/s. Sarawat Cooperative Bank. The Assessing Officer assessed the entire amount of deposits as unexplained money u/s. 69A of the Act.

In the appellate proceedings, the learned CIT(A) accepted the sources to the extent of ` 11,25,000/- and accordingly directed the Assessing Officer to sustain the addition to the extent of ` 8,55,600/-. Still aggrieved, the assessee has filed this appeal before us.

Learned AR appearing for the assessee submitted that the assessee has explained sources of deposits to be the withdrawals made on earlier occasions to the tune of ` 4,05,600/- and also the opening cash balance of ` 4,50,000/-. Learned AR submitted that he is accepting the addition sustained by the learned CIT(A) to the extent of ` 4,05,600/-. He submitted that the assessee should be given credit for opening balance of ` 4,50,000/- for the reason that the assessee has entered an agreement for sale of property on 18.10.2007 and as per the agreement, the assessee has received ` 7,00,000/- by way of cash and ` 6,00,000/- by way of cheque. The opening balance of ` 4.5 lakhs was kept out of the sale advance of ` 7,00,000/- received by way of cash.

On the contrary, learned Departmental Representative submitted that the assessee had made similar claim before the learned CIT(A) but the learned CIT(A) rejected the same on the reason that there is a gap of about ten months between the date of receipt of advance money and year end date.

We have noticed that the assessee has engaged in the business of running coaching classes. In the books of account maintained by her, the impugned Savings bank account was not accounted, meaning thereby the assessee has maintained this bank account in respect of her personal transactions. Hence deposits made into bank accounts did not find place in the books of account maintained by the assessee. We noticed that the assessee has explained sources of deposits made into bank account to be withdrawals made on earlier occasions and the same has been accepted by the learned CIT(A) partially. However, the claim of opening cash balance of ` 4.5 lakhs was not accepted, only for the reason that there is a time gap of ten months between the date of receipt of sale advance against sale of the property

In the result, appeal filed by the assessee is partly allowed.