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2019 (2) TMI 511 - AT - Income TaxAddition on account of cash deposited in bank - Held that:- AO instead of taking up the assessment of the preceding year has made the addition of the said amount by rejecting the source of the amount as shown as opening cash balance. Further, the AO has not rejected the books of accounts of the assessee and, therefore, once the assessee has established the availability of the cash in the books of account, then the proper course of action for rejecting the said claim and making the addition is to reopen the assessment of the earlier year. Hence, to the extent of availability of cash of ₹ 11,32,626/- being opening cash balance which was duly reflected in the books of account of the assessee for the year under consideration as well as in the earlier year, the same cannot be rejected and the consequential addition is not sustainable. Claim of gifts received from the mother and father both the donors are assessed to tax and filing their returns of income, then the assessee has discharged her onus of proving the identity, creditworthiness and genuineness of the transaction. In case the AO was not satisfied with the evidence produced by the assessee, the AO was very well empowered to summon the donors for their examination. Though there may be an issue of creditworthiness of the donors for giving the gifts for the earlier year as well as for the year under consideration, however, the issue of gifts given in the earlier year cannot be examined for the year under consideration as it was part of the cash introduced by the assessee in the earlier year. Further, there is no dispute that the reason and occasion of the deposit made in the bank account is to purchase a house which was purchased by the assessee. Therefore, in the facts and circumstances of the case, the addition made by the AO is deleted. - Decided in favour of assessee. Unexplained expenditure for registration of plot of land - Held that:- This issue is consequential as the assessee has explained the source of this expenditure by opening cash balance as well as the gift of ₹ 2,50,000/-. Since we have decided the issue of availability of opening cash balance as well as genuineness of the gift in favour of the assessee, the said addition made by the AO is liable to be deleted. - Decided in favour of assessee.
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