Non-furnishing of balance sheet cannot lead to presumption that there was no cash in hand

Assessee has furnished the date-wise cash balance and each and every deposit in the bank account is shown to be out of the cash balance with the assessee. The opening cash balance as per the cash account is 9,13,080/- and the closing cash balance of the year is Rs. 12,50,983/-.

The same is duly reflected in the balance sheet ended on 31st March, 2007 and 31st March, 2008 respectively. When in the electronic filing of the return there is no provision for filing of the balance sheet, then non-furnishing of the balance sheet cannot lead to the presumption that there was no cash in hand with the assessee. The assessee is a professional whose returned income is more than Rs. 18 lakhs. In view of the above, we are of the opinion that the assessee’s claim that he has an opening cash  balance of 9,13,080/- cannot be disputed. The above opening cash in hand is sufficient to explain the deposit in the bank account on 3rd and 4th April, 2007. Thereafter, admittedly, withdrawal from the bank is much more than the cash deposits. In fact, the total withdrawal from the bank as per Annexure-1 of the assessment order is 44,39,000/- as against the total deposit in the bank of 26,30,000/-. The inference of the Assessing Officer that the amount withdrawn by the assessee from the bank has been utilized for household expenditure or other expenses is without any basis. The total withdrawal by the assessee is more than 44 lakhs and in the absence of any material to presume that such huge cash withdrawal has been spent by the assessee would be incorrect. Some of the withdrawals are of huge amount, say, on 4th April, 2007, the assessee withdrew 7,00,000/-, on 29th June, 2007, the assessee withdrew in cash Rs. 10,50,000/- (Rs. 4,90,000 + 5,60,000). That to presume such huge withdrawal was spent by the assessee in the absence of any evidence of its utilization would be a wrong presumption. In view of the above, we are of the opinion that the entire cash deposit in the bank is duly explained by the assessee. We, therefore, delete the addition of 8,45,000/- sustained by the learned CIT(A).

ITAT BENCH E’ , NEW DELHI

ITA No. 3301/Del/2012 – Assessment Year : 2008-09

ITA No. 3475/Del/2012 – Assessment Year : 2008-09

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