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2018 (2) TMI 2112 - AT - Income TaxAddition on account of peak of negative cash as undisclosed investments - benefit of telescoping - search and seizure operation took place at the premises of the assessee Group - AO noticed that there is a negative cash balance in the cash book of the assessee - HELD THAT:- During the course of search, when negative cash balance was confronted to the assessee, the partner explained that such negative balance was on account of payment made out of unaccounted income and the unaccounted income has been offered as part of overall disclosure. In our considered opinion when the assets were acquired out of undisclosed income and when the entries are made in the books of accounts, it is bound to result in negative cash balance. Hence, the benefit of telescoping of such negative cash balance against disclosure made on application of funds has to be allowed. The revenue cannot make additions on both counts that is on the one hand, the additions of income has been made and on the other hand the assets acquired out of such income is treated as unexplained investment. The revenue cannot blow hot and cold in the same breath. Decided against revenue.
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