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2022 (12) TMI 1274 - AT - Income TaxReopening of assessment u/s 147 - Reason to believe - as argued CIT had granted his approval u/s.151 of the Act in a mechanical manner i.e., without any application of mind - validity of the jurisdiction that was assumed by the A.O for initiating proceedings u/s 147 and framing the consequential assessment - validity of the addition made by the A.O u/s 68 of the Act of the simpliciter cash deposits in the assessee’s bank accounts - sustainability of the addition made by the A.O in the backdrop of the merits of the case - HELD THAT:- We are unable to find favor with the same. On a perusal of the approval/sanction granted by the Pr. CIT, Raipur, find that the latter after duly recording his satisfaction had granted the sanction to the A.O for issuing notice u/s.148 of the Act to the assessee - the challenge thrown by the Ld. AR to the validity of jurisdiction assumed by the A.O on the basis of his multi-facet contentions being grossly misconceived and misplaced cannot be accepted and are accordingly rejected. Addition of simplicitor cash deposits in his bank accounts as unexplained cash credit u/s.68 - We find substance in the contentions advanced by the Ld. AR. As stated by the Ld. AR, and, rightly so, as the bank account statement/bank passbook cannot be treated as books of accounts of the assessee, hence, no addition in respect of the cash deposits could be validly made u/s.68. As the bank accounts of the assessee could not have been held to be the “books of account” of the assessee maintained for any business or profession, therefore, no addition u/s.68 of the Act could have been made in respect of the simplictor cash deposits made in the said bank accounts. Disallowance made u/s.14A - Both the lower authorities had grossly erred in law and the facts of the case in disallowing/sustaining the disallowance of the interest expenditure u/s.14A of the Act. As held in the case of CIT Vs. Sociedade De Fomento Industrial (P). Ltd. [2020 (11) TMI 277 - BOMBAY HIGH COURT] the A.O before rejecting the disallowance offered by the assessee remains under a statutory obligation to give a clear finding with reference to the accounts of the assessee that the other expenditure which were being claimed to have been incurred in respect of the non-exempt income, were in fact related to its exempt income. As in the case of the present assessee neither of the lower authorities had demonstrated that as to how any part of the interest expenditure as was claimed by the assessee as a deduction, was not relatable to any part of its taxable income - disallowance made by the A.O u/s.14A cannot be sustained and is accordingly vacated.
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