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2022 (8) TMI 1483 - AT - Income TaxUndisclosed money/investment u/s. 69A r.w.r.115BEE - cash balance as on the date of announcement of demonetization - addition made as assessee has made cash deposits into bank at least sixteen times between 01.04.2016 and 08.11.2016 and that one doctor single-handedly increased the turnover of assessee firm by 202%, increase in cash receipts is also not accepted as the bills copies submitted does not give details of patients which are incomplete in details and increasing in pharmacy sales is beyond human probabilities - CIT(A) deleted the addition - HELD THAT:- What the Ld. AO has added is the balance of cash in hand on the date of announcement of demonetization though factually, the deposit of cash in SBNs during the demonetization period was of Rs. 3.30 Cr. From the books of account and corroborative documents placed on record, we find that there is no dispute about the availability of cash balance and its source with the assessee. Thus, once availability of cash in hand is proved, assessee cannot be asked to furnish proof of acquisition of such amount in currency notes of particular denomination. We note that balance of cash in hand as on 08.11.2016 is out of opening cash balance (duly subject to assessment in AY 2016-17) and receipts during the year on account of sale of medicines and hospital receipts. Income derived from sale of medicines and hospital receipts have been subject to tax while accepting the income returned at Rs. 84.71 lakhs. Thus, we find that cash balance being part of sale of medicines and hospital receipts, cannot be brought to tax at the hands of the assessee again which will otherwise lead to taxing the same amount twice. We find no reason to interfere with the finding of the Ld. CIT(A) in respect of deletion of addition relating to balance of cash in hand on the date of announcement of demonetization. Accordingly, the addition so made by the Ld. AO stands deleted. Grounds of appeal raised by the revenue are dismissed. Enhancement done by the CIT(A) - estimating the business income @ 4% of the SBNs of Rs. 3.30 Cr. deposited by the assessee in its bank account - Primary objection of the assessee is that deposit of SBNs is from the hospital and pharmacy receipts, on which tax is paid by the assessee on the income embedded in such receipts, thus, on such receipts, further estimation of income is unjustified and tantamounting to double addition - HELD THAT:- We do find force in the submissions made by the Ld. Counsel in the above respect and are inclined to direct for the deletion of the addition made by the CIT(A) on an estimate basis, more particularly when the doubts referred by him have been cleared by the assessee by reference to corroborative material placed on record which we have discussed above while dealing with the appeal of the Revenue. Accordingly, the direction by the CIT(A) to the ld. AO for making the addition of Rs. 13.32 lakh @ 4% of Rs. 3.30 Cr. is set aside. Accordingly, grounds of cross objection of the assessee are allowed.
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