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2022 (7) TMI 942 - AT - Income TaxAddition of unexplained cash deposits in the bank account of the assessee in IDBI and HDFC - HELD THAT:- We agree with the assessee that the addition on account of cash deposits in IDBI and HDFC Banks has been confirmed by the ld. CIT(A) without appreciating the contentions of the assessee; that the same could be attributed to the cash withdrawn from the same bank accounts, which were corroborated with the bank statement also. Revenue has not controverted the fact of sufficient cash withdrawal in Bank prior to deposit. We do not agree with the ld. CIT(A) that the assessee has to demonstrate one-to-one nexus between cash deposits and withdrawals which is virtually impossible. As long as there is cash withdrawal prior to deposits and gap between the withdrawals and deposits is a reasonably short period of time, it can be, in the absence of any evidence to show the utilization of the cash withdrawal, safely presumed that the cash deposits have been sourced from the cash withdrawn. No justification in the order of the CIT(A) upholding the addition made on account of cash deposits in the bank accounts of the assessee. We therefore direct the deletion of addition of cash deposits - Accordingly, ground no. 1 and 2 are allowed. Unexplained investments - HELD THAT:- We find merit in the contention of the assessee that no actual investment was made by the assessee in shares as held by the Revenue authorities, but the assessee had only indulged in buying and selling of shares on the same day, earning profit/loss only in the process without making any investment. The assessee has reasonably demonstrated this fact through broker's note of the investment. The said contract notes clearly reflect the sale and purchase of shares within the same day. The Revenue has been unable to controvert the same. Addition to be deleted - Decided in favour of assessee. Addition made on account of borrowed loan by the assessee from his friends - HELD THAT:- AO found that the assessee made certain transactions in cash relating to share trading transactions, source of which, he stated was loans from his friends and family. However, the loans amounting to Rs. 1,00,500/- was added to his income as source of the same was not explained to the satisfaction of the Revenue authorities. The assessee had given complete list of his friends from whom loans were taken, and it is evident from the same that he had taken very small amount of loan ranging from Rs. 3,000/- to Rs. 15,000/- and all the details regarding his friends from whom loan had been taken by the assessee was given to the AO who had issued summons to them and in respect of which, two persons had confirmed having given loan to the assessee. Considering that loans were taken for the purpose of carrying out share trading transactions, which is an accepted fact and were of very small amounts and two persons have confirmed of giving loan, we see no reason to treat the loans as unexplained. AO had accepted the fact of loan taken by the assessee from one Mr. Raj Kumar Sharma, as stated at para 9.2 of the Assessment Order. Also the fact of loan of Rs. 78,000/- taken from the father of the assessee has also been accepted by the Revenue noting that it is not improbable for this amount being given out of savings and agricultural income of his father. On the same analogy the explanation of the source of these very small loans as given by friends of the assessee to help him in his share trading transactions, and which has been confirmed by two parties to be given out of their labour work income, cannot be dismissed as unbelievable - we see no reason to uphold the order of the Ld. CIT(A) confirming the addition on account of alleged unexplained loans - Assessee appeal allowed.
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