TaxTMI 
TaxTMI 
2019 (2) TMI 511
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.... 2. Under the facts and circumstances of the case the learned CIT (A) has erred in confirming the addition of Rs. 2,14,050/- on account of disallowance of plot registration expenses incurred out of opening cash balance. 3. The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing." Ground No. 1 is regarding addition made on account of cash deposited in the bank account. 2. The assessee is an individual and earning income from business and other sources. The assessee filed her return of income on 12th January, 2012 declaring total income of Rs. 2,54,887/-. In the scrutiny assessment, the AO noted that there is a cash deposit of Rs. 16,81,000/- in the two bank accounts of t....
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....zing the said amount from the bank account. The ld. CIT (A) was not impressed with the explanation of the assessee and confirmed the disallowance/addition made by the AO on this account. 3. Before us, the ld. A/R of the assessee has submitted that once the assessee is regularly assessed to tax and filing the return of income and opening cash balance is duly reflected in the books of account as on 01.04.2010, then the source of cash deposit in the bank account cannot be rejected by the AO without rejecting the books of accounts of the assessee. The ld. A/R has further contended that once the books of account of the assessee are not rejected by the AO, then the cash which is shown in the books of accounts is an explained source for deposit m....
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....0 and gift of Rs. 2,50,000/- out of which Rs. 1,50,000/- from mother and Rs. 1,00,000/- from father of the assessee. All these documents were filed before the AO, however, the ld. CIT (A) has misunderstood the fact and referred that the gift deeds were not filed before the AO while rejecting the claim of the assessee. He has also referred to the reply filed by the assessee before the AO as well as ld. CIT (A) and submitted that the assessee has discharged her onus by producing the supporting evidence of source of the cash deposit in the bank account. Since the assessee had to purchase the house property, therefore, the assessee has deposited this amount in the bank account during the year under consideration. In support of his contention, h....
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....s. 1,00,000/- from father Shri Mali Ram Agarwal. The assessee produced the gift deeds whereby the mother and father of the assessee have confirmed the gifts given of Rs. 1,50,000/- and Rs. 1,00,000/- respectively to the assessee. It is pertinent to note that the assessee has been filing her return of income regularly and also produced the return of income as well as balance sheets for the assessment years 2009-10 and 2010-11, and these facts and records are not in dispute. Since none of the returns of income in the preceding year were subjected to scrutiny assessment, therefore, the availability of cash with the assessee would not be proved by mere filing of return of income. However, the assessee has shown the availability of cash of Rs. 1....
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....ce the assessee has established the availability of the cash in the books of account, then the proper course of action for rejecting the said claim and making the addition is to reopen the assessment of the earlier year. Hence, to the extent of availability of cash of Rs. 11,32,626/- being opening cash balance which was duly reflected in the books of account of the assessee for the year under consideration as well as in the earlier year, the same cannot be rejected and the consequential addition is not sustainable. 5.1. As regards the gift of Rs. 2,50,000/-, though the assessee has also shown the gifts from her mother and father in the earlier years, however, that is not an issue before us as the source of cash for the year under considera....
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....d circumstances when both the donors are assessed to tax and filing their returns of income, then the assessee has discharged her onus of proving the identity, creditworthiness and genuineness of the transaction. In case the AO was not satisfied with the evidence produced by the assessee, the AO was very well empowered to summon the donors for their examination. Though there may be an issue of creditworthiness of the donors for giving the gifts for the earlier year as well as for the year under consideration, however, the issue of gifts given in the earlier year cannot be examined for the year under consideration as it was part of the cash introduced by the assessee in the earlier year. Further, there is no dispute that the reason and occas....