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2019 (1) TMI 196 - AT - Income TaxAddition on the basis of cheques found during survey u/s 133A - whether no any loans / advances were given by the appellant against the said cheques and that no any Hundi papers were found as regards these cheques? - Held that - The modus operandi of the business as per assessee is that money is advanced to the parties on the basis of hundis/promissory notes and as a security cheques are taken. However no corresponding promissory notes or hundis from the above mentioned six persons issuing cheques were recovered. The assessee has filed affidavits from all the persons whose cheques were found admitting that no loan was taken by them from the assessee. The aforesaid persons also appeared before the Assessing Officer and their statements were recorded. All of them corroborated with the submissions of assessee and stood fast to the affirmations made in the affidavits filed. Once the affidavit and statement of Shri Shete Rameshwar Ganpatrao has been accepted the same affidavit and statement cannot be disbelieved in the case of person who has allegedly advanced cash loan. On all the cheques allegedly received as security there is no mention of date except the cheque issued by drawer. The cheque issued by him bears the date 07-06-2006 i.e. period relevant to the assessment year 2007-08. As per the Negotiable Instrument Act 1881 (as was applicable during the relevant period) validity of cheque was six months from the date mentioned thereon. Hence the said cheque had become invalid and could not have been encashed by the assessee in the period relevant to the assessment year under appeal. On some of the cheques even the name of assessee is not mentioned. The additions have been made merely on the initial statement of the assessee without there being any corroborative material. There is no material on record to show that the assessee has extended loan to the parties named. - Decided in favour of assessee.
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