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2013 (4) TMI 90 - ITAT AHMEDABADUnexplained cash credit u/s. 68 - CIT(A) restricted the addition made by AO of Rs.43,70,000 to Rs.2,00,000/- - Held that:- Loan extended by the depositors to the assessee company does not appear to be genuine. All the loan depositors are persons of meager resources and do not have any genuine reason to extend their lifetime savings as loan to the assessee company. In all these cases cash was deposited in the bank shortly before the cheques were issued to the assessee company. All the depositors do not appear to have genuine banking transactions because the only transaction pertains to the cheque issued to the assessee company for advancing loan. Further, the opening balances maintained in the bank by the depositors are meager which establishes that the depositors have maintained the bank account only to document the loan to give a color of genuineness to these transactions. Only by establishing the existence of the individuals purported to be the depositors and creating documentary evidence for extending loan will not make the transactions genuine. Thus as AO has analyzed the depositors thread-bare and has established that they cannot be genuine depositors who could extend loans to the assessee company. Thus the order of the AO confirmed - in favour of revenue. Disallowance of interest paid on account of unexplained cash credit - CIT(A) restricted the addition made by AO of Rs.1,82,648 to Rs.11,770 - Held that:- Since the disallowance of interest of Rs.1,82,648/- is consequential to the addition made under the head cash credit invoking section 68 and since the order of the AO was sustained on that count, the order of the AO with respect to this issue was also confirmed - in favour of revenue.
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