M.VADIVEL,SALEM vs. ITO, SALEM

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Salem, dated 29.01.2015 and pertains to assessment year 2009-10. The only issue arises for consideration is with regard to addition of `1,50,812/- being the balance as on 31.03.2008 in the account maintained by the assessee with Syndicate Bank, Salem.

Shri T.S. Lakshmi Venkataraman, the Ld. representative for the assessee, submitted that as on 31.03.2008, the debit balance in the Syndicate Bank was `1,50,812.64. The Ld. representative clarified that the transaction in Syndicate Bank was not reflected in the books of accounts of the assessee. According to the Ld. representative, the assessee borrowed overdraft facility and the debit balance in the bank account does not have the character of any income, therefore, the Assessing Officer cannot take the same as income of the assessee. Even otherwise, the debit balance was as on 31.03.2008 which falls in the assessment year 2008-09, therefore, the same cannot be assessed in the assessment year 2009-10. Referring to the observation made by the Assessing Officer, the Ld. representative submitted that the assessee has not accepted the addition made by the Assessing Officer. Even assuming for argument sake that assessee accepted the addition, it will not bind the assessee since the income does not pertain to the assessment year under consideration.

On the contrary, Sh. P. Radhakrishnan, the Ld. Departmental Representative, submitted that on verification of Syndicate Bank account, the Assessing Officer found that there was debit balance of `1,50,812/-. However, there was no corresponding entry in the bank statement. In the same account on 10th January, 2009, a debit entry of `1,51,748/- was found. For this also, there was no corresponding entry. When this was pointed out to the Ld. representative, he accepted the same and offered the above said amount as income. Therefore, the Assessing Officer has rightly made the addition and hence no interference is called for.

We have considered the rival submissions on either side and perused the relevant material available on record. The Assessing Officer made two additions to the extent of `3,02,560/- in respect of the discrepancy in the bank statement. The first addition is in respect of `1,50,812/-, that is the debit as on 31.03.2008, which was carried forward to 01.04.2008. The second addition is `1,51,748/-, the credit entry found on 10.01.2009 in the Syndicate Bank OD account. The appeal before this Tribunal is only in respect of debit balance of `1,50,812/-. The addition of `1,51,748/- is not the subject matter of appeal before this Tribunal.

In the result, the appeal of the assessee is allowed.