SHRINIWAS GANGADHAR MITTAPALLI,MUMBAI vs. ITO 18(1)(3), MUMBAI

We heard the rival submissions and carefully considered the same alongwith the order of tax authorities below. We noted that in this case the Assessing Officer made an addition of Rs.54,42,249/- in respect of cash credit as he found that the opening balance in the Capital account as on 1.4.2006 after considering the revised return for 2 Shriniwas Gangadhar Mittapalli Assessment Year 2005-06, as claimed by the assessee, would be Rs.19,53,27,981/-, while assessee has shown the opening balance in the Capital account, as per audited balance sheet filed for Assessment Year 2007-08, at Rs.20,07,70,232/-. When the matter went before the CIT(A), the CIT(A) confirmed the order of Assessing Officer just observing that during the appeal proceedings, assessee has not filed any evidence for the claim while the Assessing Officer has passed a detailed and reasoned order finding discrepancy in the opening Capital account amounting to Rs.54,42,249/-. Before us, the ld. AR has submitted an explanation in respect of the difference in the opening Capital account balance amounting to Rs.54,42,249/- and referred to page 2 of the assessment order as well as the letter requesting the Assessing Officer to refer to revised return filed by the assessee for Assessment Years 2005-06 and 2006-07, and on that basis it was pointed out that there is no difference in the opening balance as on 1.4.2006. The reconciliation, as brought to our knowledge, reads as under :-

We have gone through the reconciliation filed by the assessee alongwith page 3 of the assessment order in which the Assessing Officer

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