2021 (9) TMI 627

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....um of Rs. 26,66,380/- on allegation of high cash in hand. The action being erroneous unlawful and untenable must be quashed with further directions for appropriate relief." 2. The only effective ground raised by the assessee in this appeal is against the addition made by the Assessing Officer on account of allegation of high cash in hand. 3. Facts giving rise to the present appeal are that the return of income was e-filed on 15.012.2016 declaring income amounting to Rs. 2,34,780/-. The case was selected for scrutiny through CASS. It is recorded by the Assessing Officer that the case was selected for limited scrutiny. The reason for selecting case for limited scrutiny is stated in the assessment order that there was high cash on h....

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....emonstrated by filing of bank statements that there were withdrawals made by the assessee and such withdrawal of amount was not utilized for any other purposes. He contended that the assessee proved the source of cash in hand however, the both authorities without bringing any contrary material proceeded to make addition in the hands of the assessee. He submitted that finding of authorities below is purely based on the conjectures and surmises without being supported by any material evidence hence, deserves to be deleted. 7. Ld. Sr. DR opposed these submissions and supported the orders of the authorities below. 8. I have heard contentions of both the parties and perused the material available on records. I find that Ld.CIT(A) sustained....

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....as on 01/01/2016 was Rs. 15,32,504/-, as on 01/02/2016 Rs. 23,23,354/- and as on 01/03/2016 the same was Rs. 24,71,301/- and ultimately closing balance was Rs. 27,71,301/-. Further, from the cask book it is noted that most of the expenditure in cash has been incurred on account of business promotion, conveyance expenses, telephone expenses etc. When all the facts are seen in totality, i.e., pattern of cash withdrawal as per the cash book, increased expenses payable at Rs. 23.32 lakhs as on 31/03/2016 as compared to Rs. 9.40 lakhs as on 31/03/2015, the fact that percentage of cash deposit vis-a-vis turnover was abnormally high for the year under consideration, sharp decrease in the turnover for F.Y. 2016-17 and also sharp increase in the cas....