TaxTMI 
TaxTMI 
2025 (12) TMI 1635
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....essee field its return of income on 08.07.2017 declaring an income of Rs. 1,63,750/-. The case was selected for scrutiny through CASS for limited parameters. Notices under section 143(2) of the Income-tax Act, 1961 (for short 'the Act') were issued and served on the assessee through ITBA Portal. The assessee is engaged in the business of manufacturing of Gear Boxes for industrial use. During assessment proceedings, AO observed that assessee has deposited cash in Corporation Bank account which was not disclosed in its ITR and no explanation towards source of cash deposited was furnished. The AO reproduced the abovesaid current account at pages 2 to 5 of the assessment order and further observed that assessee also deposited cash in State Bank....
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....see, the AO rejected the same and observed that assessee has withdrawn cash of Rs. 31,62,000/- only whereas cash deposited in Corporation Bank is Rs. 82,76,650/- and there is a difference of Rs. 51,14,000/-. Further he observed that assessee has filed its return of income with a delay of one year after the demonetization and further observed that the assessee has not filed ITR for AY 2015-16 whereas assessee has furnished Balance Sheet through ITBA System showing cash-in-hand amounting to Rs. 75,29,741/-, he observed that the figure shown in FY 2014-15 is an after-thought and rejected the closing balance shown in FY 2015-16. With the above observation, he gave another notice to assessee to explain the same. In response, assessee submitted a....
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..... With the above observation, he proceeded to make the difference of cash deposited reducing the cash withdrawal made by the assessee during the year as unexplained cash deposited for the year under consideration and also proceeded to make the cash-in-hand declared by the assessee as opening balance for FY 2015-16 of Rs. 77,46,537/- as unexplained amount u/s 68 of the Act. At the end, he made addition of Rs. 1,34,86,187/- 5. Aggrieved with the above order, assessee preferred an appeal before the NFAC, Delhi and filed a detailed submissions. After considering the submissions made by the assessee and material available on record along with assessment order, ld. CIT(A) observed that assessee has not furnished any written submissions in supp....
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....hat AO has not considered the opening balance of cash and prayed that the assessee has already explained the source of cash deposited which was in its possession and cash-in-hand which was deposited during the year as well as during demonetization period. 8. On the other hand, ld. DR of the Revenue submitted that assessee has not submitted any relevant information before ld. CIT(A) and also he stressed upon that assessee has not provided the return of income and also the Balance Sheet was provided after one year of demonetization period. Therefore, he relied on the findings of the lower authorities. 9. Considered the rival submissions and material placed on record. We observe that the case of the assessee was selected for scrutiny wit....
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.... which includes cash withdrawal for the year under consideration and also out of opening cash balance maintained by the assessee for the year under consideration. In our considered view, assessee has explained the source of cash deposit for the year under consideration. As far as opening cash balance and not filing the return of income i.e. AY 2015-16, this is a matter which Department has to consider and take remedial action for the relevant AY i.e. 2015-16 and it cannot reject the books of account submitted for the year under consideration. Therefore, as far as cash deposit is concerned, assessee has already explained the source of cash deposit i.e. out of opening cash balance. Therefore, the AO is unjustified in making the addition of ex....