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TMI Blog2015 (9) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... sment, but the same was not pressed by Ld A.R at the time of hearing. Hence the grounds relating to the same are dismissed as Not Pressed. 3. The facts relating to the addition made u/s 68 of the Act are that the assessing officer, while completing the assessment for assessment year 2007-08, noticed that the assessee has claimed to be possessing cash balance of Rs. 40,68,404/- as on 31.3.2004. Hence he reopened the assessment of AY 2004-05 with the following reasons:- "The assessee had not filed his return of income for the AY 2004-05. During the course of assessment proceedings relevant to A.Y 2007-08, it was observed that the assessee had cash in hand of Rs. 40,68,404/- as on 31.3.2004. However no return of income or wealth tax return h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO rejected the same. Accordingly he assessed the entire cash balance of Rs. 40,68,404/- as income of the assessee. 4. Before Ld CIT(A), the assessee submitted that he had furnished financial statements pertaining to assessment years 1998-1999 onwards. Accordingly he furnished following cash flow statement for the year under consideration. Cash in hand as on 1.4.2003 Less:- Drawings 31,67,664 25,470 31,42,194 Cash received from the estate of Ganga Tarachand Ahuja, aunty of the karta, who Expired on 14.6.2003 8,77,000 Cash generated from the business for the Year 2003-04 49,210 Cash in hand at the end of the year 31.3.2004 40,68,404 The assessee contended that the opening cash balance of Rs. 31,67,664/- could not hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erify the claim of availability of cash balance. He submitted that the assessee had prepared and submitted financial statements pertaining to FY 1997-1998 onwards. Though the assessing officer has accepted the financial statements filed for Financial Years 2004-05 to 2006-07 relating to assessment years 2005-06 to 2007-08 (i.e., succeeding assessment years), he ignored the financial statements filed for FY 1999-2000 to 2002-03 (preceding assessment years). The Ld A.R submitted that the assessee had declared opening cash balance of Rs. 31,67,664/- as on 31.3.2003 and the same could not have been assessed for AY 2004-05. He further submitted that the assessee had included the income pertaining to AY 2004-05 amounting to Rs. 49,210/- also in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is an afterthought only. He further submitted that neither the assessee nor the relatives have filed returns of income for the year under consideration. Hence the claim put forth by the assessee could not be cross verified. Hence the Ld CIT(A) was justified in confirming the assessment of cash balance claimed to be available as on 31.3.2004 as income of the assessee. 9. We have heard rival contentions and perused the record. In the written submissions filed before the Ld CIT(A), it is stated that the assessee has started filing return of income from assessment year 2006-07 onwards. The return of income filed by the assessee for AY 2007-08 was taken up for scrutiny. Before the assessing officer the assessee filed capital accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial statements filed for AY 2004-05, we notice that the assessing officer did not consider the cash flow statement pertaining to that year. The assessee had declared opening cash balance of Rs. 31,67,664/-. Since the assessee has filed the financial statements pertaining to assessment year 1998-99 onwards, we are of the view that the assessing officer was not justified in rejecting the claim of availability of opening cash balance of Rs. 31,67,664/- without rejecting the financial statements filed for various earlier years. This is particularly in view of the fact that the assessing officer has accepted the financial statements filed for AY 2005-06, even though no return of income was filed by the assessee. Hence, in our considered view, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be available at the time of his death. No one could be sure of the date of his death also. Hence, it would be impossible for anyone to quantify the amount of cash balance. Hence the said reasoning given by the tax authorities fail. The next reason cited is that the deceased person did not file return of income and hence the said cash balance could not be corroborated. We notice that the assessee has a written a letter dated 10-12-2010 before the assessing officer, wherein he has pointed out that the assessing officer is asking for details of the income of the deceased person after expiry of about six years since the demise of the executor of the will. Though the said letter was written in the context of the will executed by the father o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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