SHEETAL H SETA,MUMBAI vs. ITO W 15(1)(3), MUMBAI

The first issue in this appeal of assessee is against the order of CIT(A) in sustaining the addition made by AO of unexplained cash deposits u/s 68 of the Act amounting to Rs.2,36,710/-. For this assessee has raised following ground: -

We have heard the rival contentions and gone through the facts and circumstances of the case. Briefly stated facts are that the AO received information under AIR that the assessee has deposited cash in saving bank A/c maintained with Kotak Mahindra Bank amounting to Rs.10,50,025/- during the F.Y. 2008-09 relevant to this A.Y. 2009-10. The AO required the assessee to explain about the cash deposits, as the assessee failed to file a satisfactory explanation, the AO added the entire cash deposit as unexplained amounting to Rs.10,50,025/-. Aggrieved, assessee preferred the appeal before CIT(A), who after considering the submissions and explanation of the assessee, found that there are cash deposits made out of withdrawals during the year and going through the summary of cash withdrawals and CIT(A) restricted the addition of unexplained cash deposit at Rs.2,36,710/-. Aggrieved, now assessee is in second appeal before Tribunal.

Before us, the learned Counsel for the assessee made only one submissions that there is opening cash balance amounting to Rs.2,35,610/- i.e. cash in hand as on 31-03-2008 available with the assessee and which was not been considered by the AO or CIT(A). According to the learned Counsel, in case this cash in hand is considered there will be no unexplained cash deposit in the bank A/c. The learned Counsel for the assessee stated that this balance sheet was filed with the return of income for A.Y. 2008-09 and this cash in hand is depicted in the return filed as e- return for the relevant A.Y. 2008-09. The Bench raised query to verify this fact, but assessee stated that this matter can be remitted back to the file of the AO as this cash in hand is available in cash book of the assessee. On query from the bench, the learned Sr. DR has not objected to remanding the matter back to the file of AO. After going through the facts of the case and going through the case records, we find that the assessee has filed the balance sheet as on 31-03-2008, wherein, cash in hand as on that date is available at Rs.2,35,610/-. But this fact needs verification at the level of AO from where this cash in hand is originated in the cash book and is depicted in e-return filed by the assessee. Accordingly, this issue is restored back to the file of the AO for verification and then decide according to law. This issue of appeal is allowed for statistical purpose.

The next issue in this appeal of assessee is against the order of CIT(A) confirming the addition of unexplained cheque deposits made in Kotak Mahindra Bank amounting to Rs.5,90,574/- added u/s 68 of the Act. The alternative plea of the assessee is that the peak addition of Rs.1,05,950/- on this A/c should be made at the best. For this assessee has raised following two grounds: -

We have heard rival contentions and gone through the facts and circumstances of the case. We find that the assessee before AO as well as before CIT(A) has only made one submission that this cheque deposit in Kotak Mahindra Bank A/c transactions are recorded in the regular books of account and in respect of the same assessee produced bank book, ledger & account book of four parties and bank statements. It was claimed that certain cheque has been issued prior to cheque deposit and refund of advances given earlier to such parties. It was explained that the assessee received the cheque as advance for sale/purchase of betlle nuts, leaves and thereafter, such amounts were refunded back by the respective parties. The learned Counsel explained that this can be verified from the bank accounts i.e. cash book of the assessee and the ledger. When a query was put to the learned Sr. DR, he fairly conceded that the issue can be remitted back to the file of the AO. This need verification as stated by the learned Counsel for the assessee above, hence, we restore this matter back to the file of AO. The AO will verify the transactions whether the same are recorded or not and also the source of cheque. In term of the above the matter is restored back to the file of the AO and allowed for statistical purpose.