Appeal Success: Cash Deposit Addition Limited, Interest Payment Deletion Upheld

The appeal was filed against the addition of a cash deposit of Rs. 15,81,100 not disclosed in the cash book. The Tribunal directed the AO to restrict the addition to 1% of the amount and delete the balance, considering the NP rate accepted by the AO. In another issue, the Tribunal deleted the addition of interest paid to contractees based on a previous decision in the assessee's favor for a similar issue in a previous assessment year. The appeal was partly allowed, and the order was pronounced on 30th November 2021.

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Issues:
1. Addition of cash deposit of Rs. 15,81,100 not disclosed in the cash book.
2. Addition of interest paid to contractees.

Issue 1: Addition of cash deposit of Rs. 15,81,100 not disclosed in the cash book.
The appeal was filed against the order of Ld. CIT(A) confirming the addition of cash deposit of Rs. 15,81,100. The AO conducted a survey under section 133A and found discrepancies in the cash deposits made by the assessee. The AO alleged that Rs. 15,81,100 was deposited in the bank but not disclosed in the cash book. The assessee, a government contractor, explained that the surplus cash from project sites was deposited by managers, which might have been overlooked by the accountant. The Ld. AR argued that since the entire amount was deposited in the bank and reflected in the bank statement, it should not be treated as undisclosed income. The Ld. AR suggested taxing the income embedded in the amount. The Tribunal directed the AO to restrict the addition to 1% of Rs. 15,81,100 and delete the balance amount, considering the NP rate accepted by the AO. The ground of appeal was partly allowed.

Issue 2: Addition of interest paid to contractees.
The Ld. CIT(A) confirmed the addition of Rs. 3,50,942 as interest paid to contractees, stating it was a contingent liability. However, the Tribunal noted a previous decision in the assessee's favor for AY 2013-14, where a similar issue was decided in favor of the assessee. The Tribunal found no change in facts or law and directed deletion of the addition on this count, following the precedent. Consequently, this ground of appeal was allowed. Overall, the appeal of the assessee was partly allowed, and the order was pronounced on 30th November 2021.

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