No Addition for Difference in opening and closing cash balance if no unexplained cash was introduced

ACIT Vs Chaudhary Cars Pvt. Limited (ITAT Pune)

Brief facts are that AO noted that as per cash book for A. Y. 2011-12, the closing cash balance was of Rs.8,09,803/- whereas opening cash balance for AY 2012-13 was of Rs.7,41,900/-. Before the AO no explanation was furnished to reconcile the difference. However, during the course of appellate proceedings it was submitted that as on 31.03.2011 as per audited books of accounts appellant had closing cash balance of Rs.8,09,8031 – as per the main cash book and of Rs. 1,96,2161 – as per the Workshop cash book and total cash balance as on 31.03.2011 was Rs.10,06,019/- and not Rs.8,09,803/-. Copy of audited balance sheet which was also furnished before the AO also reflected closing cash balance of Rs.10,06,019/-. Opening cash balance of 01.04.2011 matched with the closing balance. Without going into the correctness of the reconciliation filed before me, the fact remains that the AO had not doubted the closing balance of cash as on 31.03.2011. The lesser opening cash balance as on 01.04.2011 does not call for any addition during the year under consideration as no unexplained cash was introduced in the books of accounts. Therefore, addition made by the AO of Rs.67, 903/- is deleted and ground raised by the appellant is allowed.

FULL TEXT OF THE ITAT JUDGEMENT

1. This appeal filed by the Revenue is emanating out of the order of Commissioner of Income Tax (A) – 12, Pune dt. 25.02.2016 for the assessment year 2012-13.

2. The relevant facts as culled out from the material on record are as under :-

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