9911796707
TMI Blog2012 (9) TMI 965X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue is also aggrieved regarding the relief granted by the CIT(Appeals) by deleting an addition of difference in capital account. 2. Facts apropos are that assessee, engaged in money lending business and also receiving salary, dividend, etc., filed his return of income declaring Rs. 2,96,86,448/-. During the course of assessment proceedings, assessee was required to produce the balance sheet, bank statement, etc. From the statement of affairs as on 31.3.2007 filed by the assessee, Assessing Officer came to a conclusion that there was a difference in capital account. The said difference was worked out by him as under:- Opening balance of capital i.e. as on 31.03.2006 : Rs. 13,16,06,077 Net Profit for the financial year 2006-07 was: Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 6,68,954/-, which was voluntarily offered. Further, as per the assessee, the deficit of Rs. 6,68,954/- had to be telescoped with credits of Rs. 5,21,898/- credited on 11.4.2006 and Rs. 25,000/- credited on 19.9.2006, totalling to Rs. 5,46,898/- which was separately added by the Assessing Officer. 5. CIT(Appeals), after considering submissions of the assessee, was of the opinion that if the bank accounts, which had no nexus to money lending business of the assessee, were ignored, the difference in capital account was only 6,68,954/-. He therefore, held that addition of Rs. 6,68,954/- alone was warranted and deleted the balance addition. Insofar as plea of the assessee for telescoping the unexplained credits of Rs. 5,46,898/-, wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Receipts and Payments Account. CIT(Appeals), therefore, deleted the addition without properly appreciating these facts. 7. Per contra, learned A.R. supported the order of CIT(Appeals). According to him, difference in capital account pointed out by the learned D.R. was only due to bank reconciliation entries. Further, he submitted that assessee had no money lending transaction in any bank account except in Indian Bank, East Abhiramapuram Branch. Hence other bank accounts had to be excluded. Learned A.R. further pointed out that statement of affairs produced by the learned D.R. was in respect of the money lending business, whereas, Receipts and Payments account was for the whole of the transactions of the assessee for the relevant previ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conciling his capital account, is accepted, there is still a difference of Rs. 6,68,954/-. As pointed out by the learned D.R., there is also an anomaly with regard to total of the balance in the bank account. We are, therefore, of the opinion that the matter requires a re-visit by the A.O. A.O. has to consider the statements of affairs as on 31.3.2006 and 31.3.2007 for arriving at any deficit or introduction in the capital account during the relevant previous year, taking into account the profit for the year. Assessee shall co-operate with the A.O. and file details of the work-out for arriving at the correct difference, if any, in capital account. 9. Insofar as issue of telescoping of Rs. 5,46,898/- is concerned, a perusal of the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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