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2018 (7) TMI 657 - HC - Income TaxAddition being cash found during the course of search on the basis of statement at the time of search - Held that:- We fail to appreciate the contention that an assessee will be in a state of shock at the time of the raid. A person who had done no wrong, cannot be shaken by a search and seizure operation. The search admittedly took place on 09-10-2007. The alleged agreement with Smt. Anantha Lakshmi had been entered into by the assessee, according to his subsequent theory, on 18-9-2007. In other words, the assessee, even according to his story, had received the said cash towards part of the sale consideration, just 21 days before the date of conduct of the search. It is quite strange that such a huge amount was kept in the house for nearly 20 days and the assessee, in a state of shock, had forgotten, to recall how he received the said cash, when questioned during the search operations. It is true that at that time when the assessment was completed, Section 269SS was confined only to loans and advances. But the authorities did not invoke Section 269SS to disbelieve the claim of the assessee. The authorities went by the statement of the assessee at the time of the raid and the explanation offered by him subsequently as an after thought and disbelieved the story with which he came up later. Therefore, in our considered view, the reframed substantial questions of law 1 and 2 are liable to be answered against the assessee Addition as interest income - claiming credit for TDS on entire amount in utter disregard to the provisions of Section 145 and method of accounting followed by the assessee? - Held that:- Issue as decided in PENDURTHI CHANDRASEKHAR VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-11, HYDERABAD [2018 (3) TMI 799 - TELANGANA AND ANDHRA PRADESH HIGH COURT] as held that the finding that the assessee has received interest income but chose to keep it in the account in order to get interest, is in conflict with his previous observations that there is no prohibition for the assessee to withdraw the interest on the unsecured loan in the books of account of the company. Indeed, the Revenue has not disputed the claim of the assessee that the loanee company converted the unsecured loan and unpaid interest into equity shares during the year 2011-12 and accordingly issued equity shares certificates in lieu of repayment of unsecured loans and unpaid interest thereon. As submitted by the learned counsel for the assessee, the AO could have at best directed to restrict the claim of TDS in proportion to the income admitted and to allow the balance in the year in which interest income is admitted on receipt basis - decided in favour of assessee
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