2025 (3) TMI 1829

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....in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has manifestly erred in law and on facts in determining the Total Income of assessee by sustaining an addition of Rs. 10,00,000/- over and above the correctly returned income of Rs. 5,09,730/-; the addition of Rs. 10,00,000/- sustained under 69A of the Act is wholly illegal, bad in law and liable to be set aside and quashed as the same is made on no material and purely on conjecture, particularly when the Ld. CIT(A) categorically acknowledges that the entire addition made by AO is on suspicion. Addition of Rs. 10,00,000/- 2. BECAUSE, on the facts and in the circumstances of the case, the Impugned Assessment Order Dt. 16-12-2019 passed by the Ld.....

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....aforesaid assessment order 16.12.2019 was deleted. The relevant portion of the impugned appellate order of the Ld. CIT(A) is reproduced as under: - "5 The entire addition has been made by the AO on presumption and on 'preponderance of probability' and not on evidence. Though preponderance of probability is an accepted principle to judge reliability of evidences as held by the Hon'ble Courts in plethora of cases but its application in judging the quality evidences should be done in a reasonable manner. The above action of the AO is not reasonable in treating the entire deposit made on 15.11.2016 amounting to Rs. 30,00,000/- as unexplained. Though, there is some force in the argument of the AO that the ITR for the AY. 2016-17 was....

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.... Ld. CIT(A). 3. Both sides have been heard. Materials on record have been considered. It is seen on perusal of the impugned appellate order dated 23.09.2020 of the Ld. CIT(A), relevant portion of which has already been reproduced in foregoing paragraph no. (1.1) on this order, that the Ld. CIT(A) has opined that the entire addition was made by the Assessing Officer on presumption and "preponderance of probability" and not on evidence. He has further taken the view that application of "preponderance of probability" in judging the quality of evidences should be done in a "reasonable manner". He has also stated that the action of the Assessing Officer in treating the entire deposit in bank, amounting to Rs. 30,00,000/- as unexplained was no....