TaxTMI 
TaxTMI 
2016 (10) TMI 844
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....ssioner ought not to have confirmed the addition made by the Assessing Officer of an amount of Rs. 18,98,800/- being cash deposits in bank accounts. 3. The Appellate Commissioner ought not to have confirmed the disallowance of LIC premium paid. 4. Any other grounds which the appellant may urge either at or before the date of hearing." 2. At the time of hearing, Learned Counsel for the assessee did not advance any arguments with regard to ground No.3. Ground No.4 is general in nature. Therefore, grounds 3 and 4 are not taken into consideration. Ground No.2 is with regard to not giving an opportunity of being heard before the CIT(A). Though the Learned Counsel for the assessee submitted that there are sufficient reasons for non-ap....
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....edits added back to the income returned presumably under section 68 of the Act. The assessment was thus completed at a total income of Rs. 21,00,800. 3. Aggrieved, assessee contended before the CIT(A) that the assessee was not given a proper opportunity of being heard before concluding the assessment proceedings. It was also contended, in the statement of facts filed before the CIT(A), that during the financial year the assessee deposited cash of Rs. 18,98,800 on different dates in the savings bank account and the said deposits were made out of earlier withdrawal from the same bank account. In otherwords, the same cash was recycled round the year and it was explained to the Assessing Officer at the time of submitting bank state....
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....t several years never crossed above Rs. 2 lakhs. He also submitted that in the immediately preceding year as well as in subsequent year, the income offered to tax was accepted by the Assessing Officer, which was hovering around Rs. 2 lakhs, which clearly proves that the assessee could not have earned income from the said business over and above Rs. 2 lakhs in which event, merely because there are certain deposits, Assessing Officer cannot make any addition on the ground that assessee has not furnished proof with regard to source of cash more particularly when the deposits were stated to be recycled - in which event only the peak cash credit is assessable to tax which works-out, in this case to Rs. 2,80,154. It is the contention of the Learn....
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....t be explained the amount cannot automatically be added since the expression "May" used in Section 68 of the Act imposes an obligation on the Assessing Officer to verify as to whether assessee could have earned such huge income in one year. In the instant case, it is not in dispute that the assessee's income either in the earlier year or in subsequent years has never crossed the threshold of Rs. 2 lakhs in which event the Assessing Officer could have kept the same in mind while making the addition. Even while computing the assessment to the best of his judgment, under section 144 of the Act, it is the duty of the Assessing Officer to make an addition on the basis of the available material and circumstances of each case. Judgement is a facul....