AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 465
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....ted the fact that there is no direct nexus of opening cash balance being utilized for payment of advance for land. 2.2 The Ld. CIT(A) has ignored that: fact that during the course of survey proceedings carried out au the business premises of the assessee, the assessee has not satisfactorily established the genuineness of the land advances to the parties amounting to Rs.4,28,00,000/- which have been claimed to be paid on the last day of the financial year. 3. The Ld. C1T(A; has erred in law and on faces in deleting the addition of Rs,85,60,000/- made u/s. 40A(3) of the Act on the addition of unexplained expenditure of lane advances without appreciating the fact that the lanes is not a capital assets in die case of assessee but a revenue expenditure. 4. On the facts and circumstances of the case, the ld. Commissioner of Income Tax (A) ought to have upheld the order of the Assessing Officer. 5. It is, therefore, prayed that the order of the ld. Commissioner of Income Tax (A) may be set aside and that of the Assessing Officer be restored." 2.1 Further, the Department has also taken the following additional grounds of appeal: "(i) The Ld. ....
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.... there was a delay by the assessee in filing the appeal and also the initial cause of non-appearance during the course of assessment proceedings. It was only after taking into consideration the circumstances under which the assessee could not cause appearance at the stage of initial assessment and also for the same reasons there was a delay in filing appeal before CIT in time, that the ITAT, in the interests of justice remanded the proceedings back to the file of CIT for fresh adjudication after giving due opportunity of hearing to the assessee. Further, we also observe that in the instant facts the assessee filed original return of income at a return loss of Rs. 68,979/-, and after making additions in the assessment order, the AO passed assessment order determining total income of the assessee at Rs. 6,23,74,520/-. Therefore, looking into the substantial quantum of additions made in the assessment, in the interests of justice, since the initial of assessment order was passed exparte, in our considered view, the CIT has not erred in facts and in law in allowing the assessee to produce additional evidence in support of its contentions. Further, it is settled law CIT can allow admiss....
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.... additional evidence. The CIT held that in the case of Saurin Nandkumar Shodhan in ITA number 2075/Ahmedabad/2012, it was held that in case the Department has not established that the cash available with the assessee was not utilised elsewhere, then on the basis of preponderance of probabilities, it can be assumed that the very cash was re-deposited in the bank. Therefore, if there is no other contrary evidence in possession of the Department about the utilisation of cash withdrawal, then the fact that there is re-deposit of the cash in the bank account out of the previous withdrawals cannot be ruled out. Accordingly, the Ld. CIT(Appeals) deleted the above additions. 10. Before us, the Department submitted that the Ld. CIT(Appeals) has erroneously observed that the AO has not given adverse observations in its remand report, while adjudicating this ground in favour of the assessee. Accordingly, the CIT erred in facts and in law in deleting this addition. In response, the counsel for the assessee submitted that bank statement evidencing that re-deposits were made out of withdrawals from the same bank account which were furnished during the course of appellate proceedings and they ....
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..../2013, the ITAT held that held that the entire amount of deposit made in the bank account cannot be said to be unexplained because after deposit of the cash amounts, there are withdrawals. In the case of Smt. Satya Bhama Bindal v. ITO ITA No.713/Chd/2012, ITAT held that that the concept of peak theory needs to be applied both in respect of the opening introduction of cash in hand and various transactions of cash deposits and withdrawals during the year under consideration. The above proposition was also laid down in the case of ITO. Ward-51(4),Kol vs Deb Kumar Jana ITA No.263/Kol/2012 and also in the case of Jagdish N. Thakkar v. ITO ITA No.1475/Mum/2009.The Ahmedabad Tribunal in the case of Saurin Nandkumar Shodhan in ITA number 2075/Ahmedabad/2012, held that in case the Department has not established that the cash available with the assessee was not utilised elsewhere, then on the basis of preponderance of probabilities, it can be assumed that the very cash was re-deposited in the bank. In view of the above, we are of the considered view, that the Ld. CIT(Appeals) has not erred in facts and in law in coming to the conclusion that there is a reasonable presumption that once there ....
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....s not erred in facts and law in allowing part relief to the assessee in respect of this ground of appeal. 15. We have heard the rival contentions and perused the material on record. The Lucknow ITAT in the case of Satish Chandra Pandey, Kanpur vs Department Of Income Tax in ITA No.525/LKW/2010held that when even the Assessing Officer himself admitted that the amount in question was shown in the cash flow statement as opening balance, it cannot be said that the assessee earned income to the above extent during the year under consideration, as the amount in question does not pertain to the year under consideration, therefore, it cannot be a subject matter of addition u/s. 68 of the Act. The Punjab and Haryana High Court in the case of CIT v V.P. Singh [2013] 40 taxmann.com 162 (Punjab & Haryana) held that where assessee had submitted balance-sheet before Assessing Officer and in balance-sheet closing balance or cash in hand was disclosed and entries in balance-sheet had not been disputed by Assessing Officer, opening balance could not be regarded to be undisclosed income. In the case of ITO Vs Rahul kantilal Shah (ITAT Mumbai) in ITA No. 6805 /Mum/2018, ITAT held that addition on ....