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2021 (12) TMI 353 - AT - Income TaxUnexplained cash deposits in bank - addition u/s 68 - In survey proceedings u/s. 133A certain loose sheets and registers were impounded - HELD THAT:- Due to the oversight of the Accountant certain entries have not been entered because the managers have deposited the surplus amounts which could not be disbursed to labourers at various working sites/projects. So just because these deposits could not be entered in the cash book cannot be the sole ground for making addition u/s. 68 of the Act, when the bank statement duly reflected the same. Be that as it may be, the Ld. AR alternatively suggested that at the most the income embedded in the said amount of ₹ 15,81,100/- may be taxed. It has been brought to my notice that the AO has accepted the NP @ 0.85% of the assessee’s business, therefore, for the interest of both the parties, I direct the AO to restrict the addition to 1% of ₹ 15,81,100/- and balance amount to be deleted. This ground of appeal of assessee is partly allowed. Addition being interest paid to contractees - ascertainment of liability - HELD THAT:- As decided in own case assessee follows mercantile system of accounting wherein the assessee was ascertained his liability of expenses as per terms of agreement and that the said ascertained liability of the assessee should be allowed as expenditure. As per the nature of the business of the assessee, the assessee has ascertained liability on interest expenditure and the Assessing Officer has not pointed out that the same was not ascertained, therefore, no justification on the part of the CIT(A) in confirming the impugned disallowance of interest expenditure. The same is ordered to be deleted. - Decided in favour of assessee.
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