NARESH GANPATALAL JAIN,NERUL V. DEPUTY COMMISSIONER OF INCOME TAX , DELHI

ITA 3997/MUM/2024

AI Insights

The case revolves around an appeal by Naresh Ganpatalal Jain against an order from the CIT(A), NFAC, Delhi, which confirmed an addition of Rs.1,77,118/- to the assessee's income for AY 2014-15 under section 68 of the Income Tax Act, 1961. The addition was based on a discrepancy in the capital balances reported for the years 2009-10 and 2010-11. The assessee argued that the discrepancy was due to an omitted entry of a stamp duty refund, which was later corrected. The Tribunal agreed with the assessee's alternative contention that the addition, if any, should be made in AY 2011-12, not AY 2014-15, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 32166 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Unexplained cash credit
• Section: 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI “B” BENCH : MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No. 3997/Mum/2024 Assessment Year : 2015-16 Naresh Ganpatalal Jain, 11-12, Shivaji Chowk, F-1 Sector, Nerul, Navi Mumbai PAN : ADFPJ5910L vs. Deputy Commissioner of Income Tax, National Faceless Assessment Centre, Delhi (Appellant) (Respondent) For Assessee : Shri Prashant Ghumare For Revenue : Ms. Monika H. Pande Date of Hearing : 29-01-2025 Date of Pronouncement : 30-01-2025 PER B.R. BASKARAN, A.M : The assessee has filed this appeal challenging the order dated 08-07-2024 passed by the Ld CIT(A), NFAC, Delhi and it relates to the Assessment Year (AY.) 2015-16. The only issue urged in this appeal relates to the addition of Rs.1,77,118/- made by the AO u/s 68 of the Income Tax Act, 1961 („the Act‟). 2. The facts relating to the above said addition are stated in brief. The assessee derives income Salary and also income from jewellery valuation. 2 ITA No. 3997/Mum/2024 The original assessment in the hands of the assessee was completed u/s 143(3) of the Act on 09-12-2017. Subsequently it was noticed that the assessee had declared Capital balance as on 31-03-2015 as Rs.10,20,19,630/-, while no balance sheet was filed for earlier years. Hence the AO reopened the assessment of AY 2015-16 by issuing notice u/s 148 of the Act. 3. In the reopened the assessment, the assessee furnished the details of construction of capital account of the assessee on the basis of income declared by him in the returns of income of earlier years. The AO noticed that there was a discrepancy in the said computation given by the assessee, i.e., the Capital balance as on 31.3.2010 was shown at Rs.9,23,77,531/-, while the Opening capital balance as on 1.4.2010 was shown at Rs.9,25,54,649/-. Under the Accounting principles, the closing capital balance of the immediately preceding year shall become opening capital balance of succeeding year. In this case, there was difference of Rs.1,77,118/- between the two balances and the AO assessed the same as unexplained cash credit u/s 68 of the Act in AY 2014-15. The Ld CIT(A) also confirmed the same. 4. The Ld A.R submitted that the above said difference actually represents the refund of stamp duty amount of Rs.1,78,900/- credited in bank account on 30-11-2009 and it was omitted to be credited to the Capital account for the year ending 31.3.2010. Hence the said mistake was corrected while recording capital balance as on 1.4.2010. The Ld A.R further submitted that the refund of stamp duty is not liable to tax, as the assessee has not claimed the payment of stamp duty as expenditure. Accordingly, he submitted the difference in capital account has been duly explained by the assessee and hence no addition is called for. 3 ITA No. 3997/Mum/2024 5. In the alternative, the Ld A.R submitted that the difference is related to the opening capital balance as on 1.4.2010 and hence the addition, if any, can be made only in AY 2011-12 and not in AY 2014-15. 6. We heard Ld D.R and perused the record. We agree with the alternative contentions of the assessee. The difference in capital balance is related to the financial year 2010-11. Hence the said difference is assessable to tax only in AY 2011-12, if the explanation given by the assessee is not acceptable. However, the AO has assessed the same in AY 2014-15, which is not permitted under the Act, as the said income does not pertain to AY 2014-15. On this reasoning alone, the impugned addition of Rs.1,77,118/- is liable to be deleted. 7. In view of the above, we set aside the order passed by the Ld CIT(A) and direct the AO to delete the above said addition. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 30-01-2025 Sd/- Sd/- [SANDEEP SINGH KARHAIL] [B.R. BASKARAN] JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 30-01-2025 TNMM 4 ITA No. 3997/Mum/2024 Copy to : 1) The Appellant 2) The Respondent 3) The CIT concerned 4) The D.R, ITAT, Mumbai 5) Guard file By Order Dy./Asst. Registrar I.T.A.T, Mumbai "