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2022 (6) TMI 547 - AT - Income TaxAddition relating to income estimated by the AO - A.O. took the view that the assessee has estimated the income on presumptive basis at 8% of the gross receipts declared by it - CIT(A) accepted the availability of cash balance in the books of the assessee as on 09-11-2016 and accordingly directed the A.O. to give credit for cash balance of Rs.6,62,852/- and estimate the income on the remaining amount of cash deposited by the assessee - HELD THAT:- On perusal of profit and loss account of the assessee would show that the income of the assessee consisted of interest income and other receipts. A perusal of the Balance sheet would show that the pigmy deposit collections have been shown as liability. Hence there is merit in the contentions of Ld A.R that there was no reason for the tax authorities to treat the amounts deposited into the bank account as revenue receipts in the hands of the assessee. When the deposits have been made out of book balances, there is no reason to estimate income there from. Accordingly, I set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the addition relating to income estimated out of deposits made into the bank account, which was sustained by Ld CIT(A). Appeal of assessee allowed.
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