Section 264 revision cannot worsen the assessee's position; cash-deposit addition was deleted on accepted salary-savings explanation.

Revision under section 264 of the Income-tax Act could not be used to place the assessee in a worse position than before, so the Assessing Officer could not enhance the cash-deposit addition in the set-aside proceedings. On the facts, cash savings from salary received over successive years was treated as a reasonable explanation for the demonetisation-period deposits, and the section 69A addition was deleted. A second appeal for the same assessment year and identical controversy was treated as a duplicate filing and dismissed as not maintainable.

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Issues: (i) Whether the addition under section 69A of the Income-tax Act, 1961 for cash deposits made during the demonetisation period was sustainable, and whether the Assessing Officer could enhance the addition while giving effect to the revision under section 264 of the Income-tax Act, 1961; (ii) Whether the second appeal for the same assessment year and identical controversy was maintainable.

Issue (i): Whether the addition under section 69A of the Income-tax Act, 1961 for cash deposits made during the demonetisation period was sustainable, and whether the Assessing Officer could enhance the addition while giving effect to the revision under section 264 of the Income-tax Act, 1961.

Analysis: The assessee had salary income received in cash over successive years and the Revenue had accepted the receipt of such salary to a substantial extent. In the original assessment, the source of cash deposits was accepted up to Rs. 9.6 lakh and only the balance was brought to tax. The revision under section 264 was invoked for limited relief, and the revisional direction was only to verify the sources of cash deposits from earlier years. In the set-aside proceedings, the addition was increased, but the Tribunal held that proceedings under section 264 are beneficial in nature and cannot be used to place the assessee in a worse position than before. On merits, the assessee's explanation of cash savings from salary, viewed in the factual background, was found reasonable and acceptable.

Conclusion: The addition under section 69A was directed to be deleted and the assessee succeeded on this issue.

Issue (ii): Whether the second appeal for the same assessment year and identical controversy was maintainable.

Analysis: The second appeal was found to be a duplicate filing arising from the same order and involving the same assessment year and identical issues already decided in the connected appeal.

Conclusion: The duplicate appeal was dismissed.

Final Conclusion: The assessee obtained relief in the substantive appeal on the cash-deposit addition, while the companion appeal was rejected as a duplicate filing, leaving the assessee with only partial overall success.

Ratio Decidendi: Revision under section 264 of the Income-tax Act, 1961 cannot be used to worsen the assessee's position, and an addition for cash deposits cannot stand where the explanation of cash savings from accepted salary income is found reasonable on the facts.

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