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2022 (2) TMI 44 - AT - Income TaxAddition u/s 68 - assessee could not explain the cash in hand as on 31.03.2016 since the cash balance was declared by him at NIL as on 31.03.2016 - HELD THAT - We find merit in the arguments of the Assessee that the net cash in hand as on 31.03.2016 shown by him at ₹ 25,40,868.60 could not have been ignored by the A.O. merely on the ground that assessee could not justify the huge cash in hand. Since the A.O. has not looked into the various details filed before him during the course of assessment proceedings itself in the shape of balance-sheet and P L A/c of M/s. Arun Kapoor Water Cooling Plant and M/s. Eagle Water Cooling Plant of which the assessee is proprietor and since the assessee before me has explained the availability of cash in hand as on 31.03.2016 therefore, set aside the order of the Ld. CIT(A) and direct the A.O. to deletion of the addition. Grounds raised by the assessee are accordingly allowed.
Issues:
Appeal against addition of cash in hand under section 68 of the Income Tax Act, 1961 for A.Y. 2016-2017. Analysis: 1. Issue of Addition of Cash in Hand: - The Assessing Officer (A.O.) added ?25,40,867 under section 68 of the Income Tax Act, 1961, as the assessee failed to explain the cash in hand declared in the return. - The CIT(A) upheld the addition made by the A.O. - The appellant contended that the cash in hand was justified through details of proprietorship concerns filed during assessment proceedings. - The Tribunal found merit in the appellant's arguments, noting that the A.O. did not consider the details provided earlier. - The Tribunal directed deletion of the addition, acknowledging the availability of cash in hand as explained by the appellant. 2. Grounds Raised in Appeal: - The appellant raised multiple grounds challenging the CIT(A)'s order, including errors in law and facts, violation of natural justice principles, and improper penalty and interest charges. - The appellant argued for fair consideration based on the provisions of the Income Tax Act, emphasizing the need for a proper opportunity to present their case. - The Tribunal considered the arguments presented by both sides, reviewed the A.O. and CIT(A) orders, and examined the documents submitted by the appellant. - The Tribunal found discrepancies in the A.O.'s assessment regarding the cash in hand declarations of the appellant's proprietorship concerns. - The Tribunal concluded that the A.O. overlooked crucial details provided by the appellant, leading to the direction for deletion of the addition. 3. Outcome of the Appeal: - The Tribunal allowed the appellant's appeal, setting aside the CIT(A)'s order and directing the A.O. to delete the addition of cash in hand. - The Tribunal's decision was based on the appellant's explanation supported by documentary evidence, highlighting the importance of considering all relevant details during assessment proceedings. - The Tribunal emphasized the necessity for a thorough review of submitted documents to ensure a fair and accurate assessment of the appellant's income. This detailed analysis of the judgment provides insights into the issues raised, the arguments presented, and the Tribunal's decision in favor of the appellant regarding the addition of cash in hand under section 68 of the Income Tax Act, 1961 for the relevant assessment year.
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