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2019 (7) TMI 1731 - AT - Income TaxEntitled for deduction u/s 80P on account of addition u/s. 68 - HELD THAT:- Since the assessee’s business is to accept deposits and lend advance inter alia with other activities, we are inclined to hold that income resulting on account of addition made u/s. 68 cannot be considered as income derived from business though it is income of the assessee. Even if the addition is made u/s. 68, it does not necessarily follow that such credit represents business income of the assessee as a general practice unless there is clear evidence that it represents business receipts. In the present case, it relates to granting of deduction with regard to profit/grain derived from business and unless it is proved that it is from business, deduction u/s. 80P cannot be granted. The contention of the assessee is not acceptable in view of the clear provisions of section 80P of the Act and the impugned additions cannot be said to be business receipts. Merely because the assessee is running a business in which are found certain unexplained cash credits, it does not necessarily follow that such credits represent suppressed business receipts and there would be no error of law in regarding the unexplained cash credits as income of the assessee from some independent and unknown sources unless there are strong reasons for connecting the unexplained cash credits with known sources of income of the assessee, there would be no alternative to treating them as income from other sources. Reliance is also placed on the judgment of Deviprasad Viswanath Prasad [1968 (8) TMI 5 - SUPREME COURT] wherein it was held that when the assessee pleads that the impugned cash credits came out of suppressed profit, it is for him to prove that it is so. If these receipts are allowed by treating as business receipts, then the assessee will be entitled to set off of business expenditure against these receipts which is not permissible. The assessee's business is to accept deposits and lend advance inter alia with other activities. Being so, we are inclined to hold that the assessee is not entitled for deduction under section 80P of the Act on account of addition u/s. 68 of the Act. Thus, this ground of appeal of the assessee is partly allowed for statistical purposes.
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