2026 (2) TMI 156

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....sed the following ground of appeal: "That the Ld. CIT(A) erred in law and in the facts of the case in confirming the order of the AO in making addition of Rs. 1,72,83,364/- u/s. 68 of the Act." 3. The brief facts of the case are that the assessee is a partnership firm engaged in the business of construction activity. For Assessment Year 2017-18, the assessee filed its return of income on 10.03.2018 declaring a total loss of Rs. 47,73,261/-. The case was selected for scrutiny and the assessment was completed by the Assessing Officer under section 143(3) of the Income-tax Act, 1961 ("the Act") on 27.12.2019, determining the total income at Rs. 1,25,10,103/-. 4. During the course of assessment proceedings, the Assessing Officer ....

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.... under section 68 of the Act and added the same to the total income. 5. Aggrieved by the assessment order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). In the appeal, the assessee raised several grounds. The primary grounds were that the Assessing Officer erred in computing the total income by making an addition of Rs. 1,72,83,364/- as unexplained cash credit, that the addition was wrongly made under section 68 instead of section 69A of the Act, that interest under sections 234A/B/C/D was wrongly charged, and that initiation of penalty proceedings under section 271AAC was unjustified. Before the CIT(Appeals), the assessee reiterated that the source of cash deposits was fully explained by earlier withdrawa....

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....e same time, continue withdrawing further cash from bank accounts. In the absence of any satisfactory explanation regarding the necessity and purpose of such accumulation of cash, the contention of the assessee that the cash deposits during demonetization were sourced from earlier withdrawals was not found to be convincing. Accordingly, the CIT(Appeals) confirmed the addition of Rs. 1,72,83,364/- made by the Assessing Officer and dismissed the grounds of appeal relating to the addition. The other grounds relating to interest and penalty were also dismissed. In the result, the appeal of the assessee was dismissed by the CIT(Appeals). 7. The assessee is in appeal before us against the order passed by the CIT(Appeals) dismissing the appeal ....