Tribunal allows appeal, directs deletion of part of addition, emphasizes considering withdrawals in income treatment.

The Tribunal allowed the assessee's appeal, overturning the CIT(A)'s decision and directing the AO to delete the addition to the extent of Rs. 10,67,992, confirming the balance addition of Rs. 19,85,008. The Tribunal found that since the turnover declared already included all deposits, no further addition on account of the deposited amount was justified. The Tribunal emphasized that the AO should consider the benefit of withdrawals when treating deposits as income.

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Issues:
Addition on account of cash deposited in bank.

Analysis:
The appeal involved the issue of confirming the addition of Rs. 19,85,008 on account of cash deposited in the bank. The Assessing Officer observed a mismatch between the gross receipts shown by the assessee and the total deposits made. The AO treated the entire deposit as concealed income under section 68 of the Income Tax Act, 1961. The assessee contended that the deposits represented the total turnover of the business and were duly incorporated in the gross receipts shown in the income tax return. The CIT(A) partially granted relief, confirming the addition only to the extent of Rs. 19,85,008. The assessee appealed, arguing that since the deposits were already considered in the turnover, adding the same amount as undisclosed income was unjustified. The AR reiterated that all deposits were part of the turnover declared in the return. The Tribunal noted that the turnover declared was not disputed, and all deposits were part of it. The Tribunal found that the turnover exceeded the total deposits, and the AO had not considered the benefit of withdrawals. Thus, the Tribunal allowed the appeal, directing the AO accordingly.

In conclusion, the Tribunal allowed the assessee's appeal, overturning the CIT(A)'s decision and directing the AO to delete the addition to the extent of Rs. 10,67,992, confirming the balance addition of Rs. 19,85,008. The Tribunal found that since the turnover declared already included all deposits, no further addition on account of the deposited amount was justified. The Tribunal emphasized that the AO should consider the benefit of withdrawals when treating deposits as income.

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