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2022 (6) TMI 261 - AT - Income TaxRevision u/s 263 - CIT held that the impugned assessment order has been passed by the AO without making proper verification of the interest claimed on unsecured loan treated as unexplained cash credit u/s 68 - AO's order as erroneous and prejudicial to the interests of the Revenue - AO did not disallow the interest paid on the unsecured loan treated as unexplained cash credit u/s 68 of the Act, during the scrutiny assessment - HELD THAT:- It is a settled law that no deduction /allowance is allowed and no loss can be set-off against such unexplained cash credit which is considered as income of the assessee. The Gujarat High Court in the case of Fakir Mohmed Haji Hasan [2000 (8) TMI 44 - GUJARAT HIGH COURT] held that when (unexplained) income cannot be classified under any one of the heads of income under Section 14, it follows that the question of giving any deductions under the provisions which correspond to such heads of income will not arise. As it is seen that it is a settled proposition of law that no deduction /allowance is allowable against such unexplained cash credit which is considered as income of the assessee. In the present facts, during the course of assessment, the AO made an addition of ₹ 4,73,10,000/- on account of unexplained cash credit of unsecured loan u/s 68 - AO omitted to disallow the interest paid on the said unsecured loan while finalising the scrutiny assessment, which has resulted in under assessment of income. In our view, in the instant facts, the Principal CIT has not erred in facts and in law in setting aside the assessment order u/s. 263 of the Act by holding that the order is erroneous and prejudicial to the interests of the Revenue - Decided against assessee.
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