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2019 (2) TMI 1726 - AT - Income TaxScrutiny assessment - examining as to whether the cash deposit has been made from undisclosed sources and in this respect our attention was invited to the assessment order itself where the Assessing Officer had himself noted the reason for selection of the case - HELD THAT:- AO himself noted in the assessment order that the case of the assessee was selected for examination of cash deposits in the bank account. However, the assessment order further records that the purpose of examination was also to examine the deposits of cash during demonetization period. Admittedly, the demonetization period was between 6th November, 2016 to 31st December, 2016. Therefore, the addition, if any, on account of demonetization deposits in the bank can only be made in the assessment year 2017-18. I further find that Assessing Officer has assumed that activities of the assessee were not genuine and therefore, had made the addition of the entire gross receipts. On the one hand he is agreeing with the gross receipts declared by the assessee whereas on the other hand he is not agreeing with the expenditure claimed by the assessee despite of the fact that the assessee herself has offered the net income of ₹ 5,67,490/- out of gross receipt of ₹ 7,00,500/-. The Assessing Officer again made the addition of the gross receipts and that too without giving benefit of already declared income. The action of the Assessing Officer is highly unjustified. Further find that the reason for selection of case of the assessee was for examination of bank deposits in the bank and which the assessee had explained as per her letters placed wherein the assessee had explained that she had deposited ₹ 20,000/- in the State Bank of India and further PPF of ₹ 80,000/- in the same bank. She had also explained that the deposits were out of her income earned from the tuition. The only purpose for selection of the case was the examination of cash deposits which the Assessing Officer extended to other issues and that too without obtaining the necessary sanction and therefore, also the action of the AO is highly unjustified.
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