2026 (7) TMI 303

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....facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,43,95,419/-made on account of unexplained salary paid in cash, by disregarding the material gathered during search proceedings, seized documents, and statements recorded under section 132(4) of the Income-tax Act, 1961, which indicated incurrence of substantial salary expenditure in cash during the relevant assessment year 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in holding that the Assessing Officer misinterpreted the statements recorded under section 132(4), despite such statements having evidentiary value and no specific OR substantiated retraction having been furnis....

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..... 4. Brief facts of the case are that the assessee company is engaged in the business of construction and Infrastructure activities of commercial and industrial buildings. A search and seizure operation u/s.132 of the Act was conducted on the companies and individual initiated with the ECR group on 10.01.2023. 5. During the search loose papers and some documents were seized related to the assessee which showed that the assessee was making cash payment for salary and other expenses on the basis of loose papers and the documents. The AO made an addition of Rs. 1,43,95,419/- on account of unexplained salary paid in cash. Against this addition the assessee filed an appeal before the Ld. CIT(A) who deleted this addition on the basis of pap....

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....raised following grounds of appeal :- "1. That the learned CIT(A) has rightly deleted the addition of Rs. 1,43,95,419 made by the Assessing Officer under the head Salary Expenses on account of alleged unaccounted cash payments, as the 1 addition was founded merely on Investigation Wing findings, selective reliance on statements recorded under section 132(4), and certain loose Excel sheets OR WhatsApp chats, without establishing any actual cash outflow OR expenditure outside the books of account, 2. That the Assessing Officer failed to bring on record any corroborative evidence such as cash withdrawals, parallel books, undisclosed bank 2 accounts, confirmation from employees, OR any identifiable cash trail to substantiate t....