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2022 (6) TMI 690 - AT - Income TaxAddition on account of deposit of cash during the demonetization period - cash deposits which the AO has held to be sham transactions, were routed through the books of account maintained by the assessee - HELD THAT:- We fully agree with the contention of the Ld. AR that the AO had no sound reason to reject the contention of the assessee vis-à-vis the source of cash deposits made in the bank account of M/s Syna Creations especially when the deposits have been routed through the regular books of account of the assessee. It is also a case in point that books of account have not been rejected and the AO has accepted the sales as well as purchases and also the expenses claimed by the assessee and has only found fault with the quantum of cash deposits during the demonetization period. Thus, apparently, this impugned addition has been made without any foundation and in our considered view, the AO has acted on mere surmise and conjectures without duly appreciating the undisputed fact that he himself has accepted the books of account as well as the book results. The Ld.CIT(A) has also upheld the findings of the AO without assigning any cogent reason and he also seems to have simply approved the addition without proper appreciation of facts. As also to be noted that on the same set of facts, the AO has accepted the cash deposit of Rs.17 lacs in another proprietorship concern of the assessee namely M/s Wool World but has proceeded to doubt the cash deposited in the proprietorship concern M/s Syna Creations without any cogent reason. We are of considered view that the impugned addition was not called for especially when the assessee’s books of account have not been rejected and all the income and expenses and the book results have been accepted except the cash deposit without there being any iota of evidence, which would point out that the assessee had deposited her unaccounted money under the garb of sales or receipts from sister concern M/s Rajan Enterprises. AO has proceeded in a very hasty and an illogical manner without taking a holistic view of the entire case record before him. It is also to be noted that the captioned case was a search case and even during the course of search no incriminating material was found which would point out towards the assessee introducing her unaccounted cash into the books of account under the garb of sales or receipts from sister concern. Therefore, we find ourselves unable to confirm the view taken by the Ld.CIT(A) in upholding the addition of Rs.10 lacs and we set aside the order of the Ld.CIT(A) on the issue and direct the AO to delete the same.- Decided in favour of assessee.
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