SH. SANJEEV KHATRI,NEW DELHI vs. ITO, NEW DELHI

The only issue involved in this appeal relates to the sustenance of the addition of Rs.10,20,123/- by the CIT (A) made by the AO in respect of the cash deposited by the assessee in his saving bank account.

I heard the rival submissions and carefully considered the same. I noted that the assessee has withdrawn a sum of Rs.5,45,600/- and Rs.4,74,523/- from his proprietorship concern, M/s. National Trading Company. The withdrawal of the said amount is appearing in the balance sheet for the year ended 31.03.2007 and 31.03.2008 respectively in addition to the drawing being made by the assessee amounting to Rs.1,32,800/- and Rs.1,29,535/-. In my opinion, the amount withdrawal from the proprietorship concern proving the source of the cash deposited by the assessee in his bank account. The AO has taken a view that since the assessee was not doing any work during the year, it would have been incurred by the assessee for meeting out his debit expenses. Such observation made by the AO and confirmed by the CIT (A), in my opinion, is just based on conjectures and surmises. They have not appreciated the balance sheet filed by the assessee in each of the assessment year. The assessee has shown a net profit of Rs.1,65,500/- and Rs.1,61,750/- respectively in his proprietorship concern. This itself proved that the presumption made by the Assessing Officer does not have legs to stand. I accordingly delete the addition.

In the result, the appeal of the assessee is allowed. Order pronounced in open court on this 15th day of February, 2016.