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2016 (10) TMI 597 - AT - Income TaxAddition on account of cash deposits in bank account - protective addition v/s substantive addition - Held that:- Neither the Ld. AO nor the Ld. CIT(A) have taken care to ascertain the extent to which cash deposits in bank account, totaling ₹ 1,29,74,300/- was included in the sales turnover of the assessee, originally shown by assessee at ₹ 61,00,552/- and changed later to ₹ 2,07,56,738/-. Thus, to that extent, not only the amount is fully added on account of cash deposited in bank account ; but business profit @ 8% is also added to the income of the assessee. This has, therefore, resulted in double addition, which cannot be upheld. When an appellate authority converts a protective addition into substantive addition ; there must be good reasons for it. It cannot be done lightly without consideration of relevant facts and circumstances, without due application of mind, and without sound basis. Also protective addition cannot be converted into substantive addition in the hands of an assessee merely because substantive addition was not made in the hands of another assessee. What has to be seen is whether substantive additions in the hands of the assessee is just and reasonable in the overall facts and circumstances of the case. Further, double taxation of same amount is against basic tenets of taxation. Moreover, neither the Ld. AO nor Ld. CIT(A) have ,in their respective orders adequately dealt with or specifically rejected the facts (summarized in paragraph 3.2 of this order) claimed by the appellant in the proceedings before lower authorities. On cumulative consideration of the aforesaid facts and circumstances, we set aside the impugned order of Ld. CIT(A) and restore the case to the file of Ld. AO for denovo assessment. The Ld. AO in the proceedings for denovo assessment will be free to make any inquiries and investigations. Also, the assessee will be free to furnish any evidences and explanations.
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