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2022 (7) TMI 491 - ITAT SURATAddition of cash receipts - AO made addition by taking a view that in a survey was conducted u/s 133A on 31.12.2009 at business premises of assessee, certain documents were found and impounded, which shows that the assessee company received Rs. 1.239 crore in cash against booking of residential units apart from consideration received in cheque from 37 persons - HELD THAT:- The cash receipt was not shown in the P&L Account for A.Y. 2008-09. Before ld CIT(A), the assessee filed detailed written submissions and the supporting documents to substantiate the facts that the cash components received from the 37 booking parties were included in the books of accounts. On the additional evidences filed with the submissions, the ld. CIT(A) directed the assessing officer to file his remand report. The contents of the remand report and the rejoinder filed by the assessee are not repeated herein as the same has been recorded - we find that in the remand report, the assessing Officer instead of verifying whether cash component is recorded in the books of accounts and has been included in the income and offered for tax or not, took a different stand that the genuineness of amount was not proved by the assessee. The real issue during the assessment was that whether the cash received by assessee has been duly impounded for profit or not? - We find that the ld. CIT(A) rightly appreciated the fact that once the advance as per the impounded material is found matching with the Schedule of advances in the final account. There was no reasonable cause to doubt these cash payments as being outside the books. AO has not brought any evidence that the impounded record did not recorded in the final books. It is interesting to note that survey was conducted by survey team in December 2009 and the notice under section 148 was served on 29th March 2014. The assessing officer kept the matter under cold storage for four years. CIT(A) on appreciation of fact, found that the assessee has included the cash component in his regular books of account and deleted the addition. No contrary fact or law is brought to our notice to take other view. Thus, we affirm the order of ld. CIT(A) on deleting the addition of Rs. 1.239 crore. In the result, the ground of appeal is dismissed. Disallowance of interest expenses - AO made the addition by taking a view that assessee received interest of Rs. 45.41 lacs and paid interest of Rs. 35.72 lacs - HELD THAT:- We find that the CIT(A) has given relief to the assessee by holding that though, the borrowings from HUDCO were for the purpose of project only, however, the account shows that a substantial part of borrowing were diverted to various parties on interest and earned interest of Rs. 45.41 lacs from such advances. It was held the department has not to see whether HUDCO permitted the assessee to do or not. The fact is that about 79% of borrowings from HUDCO were diverted for earning interest income. The total interest expenses incurred during the year is Rs. 60,96,751/-, out of this amount proportionate interest expenses of Rs. 35,72,114/- attributable to earning of interest income, has been duly claimed as a set off against the interest income earned. The balance amount of interest expenses of Rs. 25,24,637/- has been added to work in progress (WIP) which is shown in audited P&L account. The interest had earned interest income on parking of spare funds, is taxable, however, the interest expenses for earning it is to be allowable. It was held that the claim of assessee in this regard is totally as per accounting practice and law. We find that the ld CIT(A) granted relief to the assessee on appreciation of facts in proper perspective. No contrary fact or law is brought to our notice to take other view. Thus, we affirm the order of ld. CIT(A) on deleting the disallowance of interest expenses. Revenue appeal dismissed.
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