Appeal allowed, cash deposit addition order deleted. Addition must relate to reopened issue. Assessing Officer directed to delete.

The appeal was allowed, and the order directing the deletion of the cash deposit addition was pronounced in court on 17th February 2023. The judicial member emphasized that additions made during assessment proceedings should be related to the escaped income for which the assessment was reopened. Since the addition of cash was unrelated to the reopened issue of the loan's genuineness, it was deemed inconsistent and unsustainable. The Assessing Officer was directed to delete the addition of cash deposited in the bank account.

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Issues:
1. Addition of cash deposited in the bank account during assessment proceedings.
2. Reopening of assessment under Section 147 of the Income-Tax Act, 1961.
3. Consistency in additions made during assessment proceedings.

Analysis:
1. The dispute in the appeal revolved around the addition of Rs.2,68,819 on account of cash deposited in the bank account. The Assessing Officer added this amount during the assessment, which the assessee contested before the learned Commissioner (Appeals).

2. The assessment was reopened under Section 147 of the Income-Tax Act, 1961, based on the alleged non-genuineness of a loan availed by the assessee. The Assessing Officer called for explanations regarding the source of investment made by the assessee in a property. Despite the reopening being related to the loan, the addition made during assessment was for cash deposited in the bank account.

3. The judicial member noted that the Assessing Officer did not add the loan amount during the assessment, even though the reopening was based on its alleged non-genuineness. Instead, a different item of income, the cash deposited in the bank account, was added. The judicial member emphasized that any addition during assessment proceedings should be related to the escaped income for which the assessment was reopened. In this case, as the addition of cash was unrelated to the reopened issue of the loan's genuineness, it was deemed inconsistent and unsustainable.

4. The judicial member referenced legal precedents to support the decision that additions made during assessment proceedings should be connected to the escaped income for which the assessment was reopened. As the Assessing Officer added a different item of income without addressing the loan issue, the addition of cash was deemed unjustified. Consequently, the judicial member directed the Assessing Officer to delete the addition of cash deposited in the bank account.

5. Ultimately, the appeal was allowed, and the order directing the deletion of the cash deposit addition was pronounced in the open court on 17th February 2023.

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