SHRI SANJAY GUPTA,DELHI vs. ACIT, CENTRAL CIRCLE-04, DELHI

1. That the CIT (Appeals) has erred in upholding an addition of INR 12,40,000/- out of total addition of INR 21,40,000/- made by the Assessing Officer u/s 68 of the Act read with Section 115BBE on account of cash deposited by the assessee in his bank account out of cash in hand available with him which has been arbitrarily alleged to be unexplained.

The learned counsel submitted that, That the CIT (Appeals) has erred in upholding an addition of INR 12,40,000/- out of total addition of INR 21,40,000/- made by the Assessing Officer u/s 68 of the Act read with Section 115BBE on account of cash deposited by the assessee in his bank account out of cash in hand available with him which has been arbitrarily alleged to be unexplained. He further submitted that, That the appellant has duly furnished complete and verifiable explanation regarding the cash in hand available with him and the CIT (Appeals) ought to have deleted the whole of the addition which was arbitrarily made by the Assessing Officer.

Further elaborately the facts of the case the ld. counsel submitted that the assessee during FY 2016-17 deposited Rs. 36,40,000/- to his bank account out of opening cash balance of Rs. 39,26,681/- as on 09.11.2016 in the hands of assessee. The ld. counsel submitted said cash balance was accrued to the assessee out of cash in hand as on 01.04.2016 of Rs. 27,62,661/- and cash withdrawal from the bank account of Rs. 38,00,000/- from 01.04.2016 to 08.11.2016 after deducting drawings of Rs. 26,35,980/-. He also submitted that the copy of balance sheet of immediately preceding FY 2015-16 clearly show that there was closing cash balance of Rs. 27,62,661/- was brought as opening balance for FY 2016-17 on 01.04.2016. The ld. counsel submitted that the Assessing Officer has allowed credit of three deposits of 25.10.2016, 28.10.2016 & 29.10.2016 totaling to Rs. 15 lakh but has not allowed credence of withdrawals on 05.04.2016 & 11.05.2016 of Rs. 5 lakh each totaling to Rs. 10 lakh without any basis. The ld. AR further drawing our attention towards para 7.8 & 8 of the first appellate order submitted that the ld. CIT(A) has considered the average withdrawal of Rs. 4.5 lac per month and has allowed credit of Rs. 9 lakh confirming the part addition of Rs. 12,40,000/- without any basis and ignoring the factum of cash in hand as on 09.11.2016 therefore entire addition may kindly be deleted. 5. Replying to the above, the ld. Senior DR supported the order of the authorities below. 6. On careful consideration of above, first of all, we note that the assessee before the authorities below has submitted following summary of cash flow for the period 01.04.2016 to 30.12.2016:- Summarized cash flow for the period 01.04.2016 to 30.12.2016 Particulars Amount Cash in hand as on 01.04.2016 27,62,661 Add: cash withdrawal from bank 38,00,000 accounts Less: Cash deposit in bank account 0 Less: Drawings 26,35,982 Cash in hand as on 08.11.2016 39,26,681 2 Particulars Amount Opening balance 09.11.2016 39,26,881 Add: cash withdrawal from bank 4,78,000 accounts (after 09.11.2016) Less: Cash deposit in bank account 36,40,000 Less: Drawings 2,46,122 Closing balance as on 30.12.2016 5,18,559