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2022 (7) TMI 1058 - AT - Income TaxAddition of interest credited in Escrow Account - AR contended that the assessee has no right to receive the interest in the impugned year and mere credit of the interest in the Escrow Account would not result in accrual until there is a right to receive the same - whether assessee had not earned any right in respect of the sale consideration nor the interest credited in the Escrow Account? - whether the interest has accrued in the relevant assessment years and can be brought to tax? - HELD THAT:- In the instant case, the condition was imposed for withdrawal of the money as per clause 10 of the SPA entered by the assessee and others with M/s.Exide Industries Limited. As per clause 5.1 of the Escrow Agreement, the assessee did not have any right to receive the interest credited in the Escrow Account unless and until the Sales Tax liability was cleared. The total sales tax liability in the instant case was far exceeding the consideration which was deposited in the Escrow Account by the purchaser. The assessee’s had disclosed for assessment, the entire interest income that was credited over a period of time and received by the assessee during the financial year relevant to the assessment year 2018-2019. In the light of the above said factual situation, we deem it appropriate to delete the addition made by the A.O. and sustained by the CIT(A) with reference to the interest income that is credited in the relevant assessment year. Unexplained Cash Deposit - assessee has furnished a copy of cash flow summary and the cash book along with the bank statement, wherein it is seen that there are cash withdrawals - HELD THAT:- In the interest of justice and equity, we restore the issue to the files of the A.O. The A.O. is directed to examine the cash flow summary and the cash book along with the bank statement and decide the matter afresh in accordance with law. Needless to state, the assessee shall be heard before a decision is taken in the matter.
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