TMI Blog2014 (1) TMI 1862X X X X Extracts X X X X X X X X Extracts X X X X ..... there were no details and no explanation about nature and source. A.O. could have been justified in considering only these two amounts for addition in the year. Advances were not shown in the year ending 31-03-2005 whereas, cash balance was increased in that year. When A.O. was completing the assessments in a block, he is supposed to consider the cash flow over a period of time vis- -vis the investments and assets found in the course of search. There is nothing on record to examine, whether assessee has made any investments or has any unexplained investments or assets or even unexplained sources for making any investments. A.O. seems to have not examined any of the issues and since, other years assessments orders are also not before us, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - on 01.04.2002. 2. Briefly sated facts are that as part of search and seizure operations conducted under section 132 of the I.T. Act, 1961 in the group cases of AMR Constructions on 16.12.2008., assessee was also covered. Consequently, assessments were completed under section 143(3) read with section 153A of the Act. In the impugned A.Y. the total income was determined at ₹ 18,31,969/- by making addition of ₹ 17,50,369/-. This amount was arrived at by the A.O. as stated in para 1.1 onwards in the assessment order which reads as under : 1.1 During the course of assessment proceedings, the assessee was requested to furnish the break up and details of the Opening Capital of ₹ 26,15,109/- along with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alance sheet, it is clearly evident that the alleged explanation of the assessee that it was from out of accumulation to Opening Capital as on 01-04-2002 is without any basis and not properly explained with supporting evidence. Only after search operation in the assessee's case, in order to make the Assessing Officer believe that matching sources for Cash on Hand was available by way of Opening Capital, the assessee has for the first time prepared an adjusted Capital Account and Balance sheet and tried to substantiate that the sources for the above assets were properly explained. The burden of proving the sources for the investments made to the satisfaction of the Assessing Officer lies on the assessee. 1.3. Since the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credited in assessee's account on very first day of accounting year and explanation offered by assessee is not accepted, such amount may be assessed as income of assessee for that very year and not in the next year. This stand is further fortified by the decision of the Rajasthan High Court in the case of CIT V Parameshwar Bohra (2007) 208 CTR (Raj) 218. Therefore, the addition made by the Assessing Officer do not have legs to stand and the Assessing Officer is directed to delete the addition of ₹ 17,50,369/-. 4. Referring to the assessment order and the CIT(A) order, the learned D.R. submitted that the A.O. has brought to tax the unexplained advances of ₹ 8 lakhs and cash of ₹ 9,50,369/- which are available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us assets and liabilities in any of the enclosed documents filed with the returns earlier. In the absence of such evidence, A.O. was in a way justified in disbelieving the cash balance which is almost ten times the income. Even for the advances also, there were no details and no explanation about nature and source. Therefore, A.O. could have been justified in considering only these two amounts for addition in the year. However, the A.O. did not take into consideration that these advances and cash balance shown to have been available with the assessee from 31.03.2002 were carried-over from that year to later years also without there being any investment up to 31.03.2004. Advances were not shown in the year ending 31-03-2005 whereas, cash bal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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