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2011 (8) TMI 1067 - AT - Income TaxUndisclosed Cash Credits u/s 68 - Assessee has received fresh loans during the year from three of its Directors. The AO treated the majority of the loans as genuine but made the addition of the amounts which were deposited in cash in the bank account of the creditors -The assessee submitted an explanation to explain the credits in the accounts of the creditors, but AO dis-believed it - CIT(A) confirmed the addition - HELD THAT:- AO dis-believed part of the deposits which has been received by the assessee through the banking channel but there was cash deposit of similar amount in the accounts of the creditor on or around the date on which the assessee received the amount. Since the assessee has proved the identity and also creditworthiness of these lenders, the assessee cannot be asked to prove the source of the source of the creditors. There is no evidence on the record which could show that the deposits made in the books of account of the creditors were from the money belonging to the assessee itself. Similarly, the explanation about the source of deposit in the creditors account, if not found to be acceptable, then also the addition cannot be made in the hands of the assessee. It may be subjective to the proceedings for inclusion of the amount as income of the depositors from the undisclosed sources or if they are found benami then the real owner can be brought to the tax - Decision in favour of Assessee. Unexplained Cash Deposit - There was a cash deposits in the two bank accounts held by the assessee. The assessee submitted an explanation that the amount deposited in the bank accounts are received from the debtors/client and also cash withdrawals from the bank account of the company which have been accounted for in the books of account - CIT(A) considered them as unexplained cash deposits on the basis of small time gap between the withdrawals and corresponding to cash deposits - HELD THAT:- We hold that the assessee was maintaining books of account and the assessee has submitted an explanation that the deposits in the bank account were out of the cash withdrawals from the bank and cash in hand available with the assessee and also from the advances received from the clients entered into the books of account. The ITAT Delhi ‘A’ Bench in the case of ASSISTANT COMMISSIONER OF INCOME-TAX. VERSUS BALDEV RAJ CHARLA AND OTHERS. [2008 (12) TMI 241 - ITAT DELHI-C],held as under simply because there was a time gap, the explanation of the assessee cannot be rejected. Assessee has to maintain margins with N.S.E. at short notice and for that ready cash in hand has to be maintained. Since the deposits are from the cash balance available to the assessee in its books of account, therefore, in our considered view, no addition is called for. The addition cannot be made or sustained on the basis that there was time gap between withdrawal and deposits. When cash balance is available in cash book maintained no addition can be made. In view of this factual position, we set aside the orders of the authorities - Decision in favour of Assessee. Interest charged u/s 234D - The question involved was regarding the chargeability of interest u/s 234D in respect of assessment year 2003-04 - HELD THAT:- In the instant case of the assessee, the assessment year involved is 2003-04 under consideration before us, therefore, tax authorities were not justified in charging interest u/s 234D from the assessee and the same is liable to be deleted in view of the decision of Special Bench of the ITAT in the case of INCOME-TAX OFFICER, WARD 11 (1), NEW DELHI. VERSUS EKTA PROMOTERS (P.) LIMITED. [2008 (7) TMI 452 - ITAT DELHI-E]. We order accordingly. - Decision in favour of Assessee.
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