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2019 (11) TMI 198 - AT - Income TaxAddition of cash Deposit in bank accounts - HELD THAT:- Revenue before us during the course of arguments and also in the written submissions have not disputed the correctness of the cashbook. Further, it was also not the case of the Assessing Officer that the cash book maintained by the assessee was incorrect. In view of the above, once the assessee was able to explain the source of deposits in the bank based on the cash book, which were admittedly not disputed and rejected by the AO, therefore, no addition on the basis of the bank deposit can be made out and accordingly, the ground raised by the Revenue is liable to be dismissed. Addition in respect of cash deposits in the account of various creditors - According to AO, the confirmations were filed, but no copy of IT returns and computation and bank statement not filed. Assessee has not proved the deposit, as he added the same in the income - HELD THAT:- As is clear from the tabulatio Assessing Officer had made the addition even in respect of Axis Bank and Barclay Finance. This shows the total non-application of mind by the Assessing officer. In respect of these two creditors, we have no doubts that these are duly explained creditors being the financial Institution/bank, hence, the addition are deleted. With respect to Renu Verma, we had already mentioned that the deposit in the bank account of Renu Verma was duly explained by her in the return of income filed by her. Further, she had also explained that the said amount was duly given by her to her husband. In our view, the assessee had discharged his onus and therefore, the addition made by the AO qua Renu Verma was uncalled for. AO was asked by the assessee during the assessment proceedings to summon all these creditors including Renu Verma, but theAO failed to exercise his powers under the Act. Hence, for this reason also, this addition is deleted. Creditor Arun Chaddha, the confirmation of account was placed by the assessee in the paper book at page 129 and 130. The amount of ₹ 5 lacs was paid by Shri Arun Chaddha through cheque drawn on Shreyas Gramin Bank, SB 791. The above said fact was not disputed by the Assessing Officer in the remand report. In view of the above, the addition made by the assessing officer on account of creditor Arun Chadda is deleted. In respect of Nisha Agarwal - As per confirmation before AO, a closing balance of ₹ 468375/- was mentioned whereas as per confirmation before CIT(A), it was mentioned as ₹ 4,50,000/-. Difference between the two is a very small amount and moreover, the creditor in the books of account of the assessee are required to be seen and in the present case, the amount shown in the assessee’s account was less as compared to the confirmation before the AO. In view of the above, we do not find any reason to uphold the action of AO In respect of Shree Timber, the assessee has placed at page 146 to 188 the confirmation from shree Timber through its proprietor sh. Akhil Bansal for an amount of ₹ 2,00,000/-. Even the return of income was placed on record for the relevant assessment year. Since the identity, capacity and creditworthiness of the creditor are beyond the shade of doubt, therefore, the deletion made by the CIT(A) is required to be upheld. In respect to Bharat Bansal the confirmation of account clearly shows the receipt of ₹ 1,50,000/- through the banking channel and therefore, the amount remained to be unpaid by the assessee was only ₹ 1,50,000/-. The said amount was not reflected in the books of account of the assessee. In view of the above, the assessee failed to give any explanation for the credit of ₹ 1,50,000/-. In view of the above, the appeal of the Revenue is dismissed as the assessee’s explanation in respect of ₹ 1,50,000/- is accepted on the basis of the books of account of the Bharat Bansal. However, the C.O. of the assessee in respect of remaining ₹ 1,50,000/- which was sustained by the ld. CIT(A), we are of the opinion that the assessee’s explanation is without any merit and accordingly, the same is dismissed. Disallowance u/s 40(a)(ia) - interest paid to Barklay Finance Co. without deduction of IDS - HELD THAT:- The payment was made to Barklay Finance Co. which is a bankand is assessed to Income-tax. In our considered opinion, the assessee was not required to deduct the TDS while making the payment of interest and principal to Barklay Finance CO. The bank is liable to be taxed on the interest income and it is not the case of the AO that the bank has not declared the interest income in its return of income and has not paid the taxes. In our view this issue is of applicability to proviso to section 40(a)(ia) is covered in favour of the assessee by the decision of Hon’ble High Court in the matter of Ansal Land Mark, [2015 (9) TMI 79 - DELHI HIGH COURT] wherein Delhi High Court has followed the decision of Agra Tribunal in the matter of Rajeev Agarwal [2014 (6) TMI 79 - ITAT AGRA]
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