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2023 (2) TMI 82 - AT - Income TaxCash deposits made in the bank account - As confronted to explain the source of cash deposits, the assessee explained that it had declared a sum of Rs 6 crores as income under Income Declaration Scheme which was utilized for depositing cash in bank accounts. The assessee company further explained that on money received from various customers in the Amar Harmony Project which were offered to tax is also available for explaining the cash deposits made by the assessee - HELD THAT:- AO erred in understanding the meaning of the term ‘utilise’ as ‘spent’, which is factually incorrect, as is evident from the entry passed in the cash book supra. Hence we hold that the assessee company indeed had sufficient cash balance to make cash deposits in the bank account. We find that the assessee had actually disclosed Rs 18,12,40,800/- (6,00,00,000 + 12,12,40,800) in IDS 2016 and in survey. Out of this, a sum of Rs 12,12,40,800/- represent on money received from various customers in the project Amar Harmony at Taloja at the rate of Rs 400 per square feet for 303102 square feet sold. Hence only a sum of Rs 7,35,70,750/- was utilized by the assessee company for making advances to various parties as is evident from the balance sheet of the assessee company and remaining sum of Rs 10,76,70,050/- on 22/09/2016 was very much available in the form of cash balance with the assessee company which explains the total cash deposits made during 22/09/2016 to 31/03/2017 which includes the demonetization period of 09/11/2016 to 31/12/2016 also. We have no hesitation to hold that the entire cash deposits made by the assessee company stood properly explained by way of available cash balance and hence there is no scope of making any addition towards unexplained cash deposits. AO is hereby directed to delete the addition made in the sum. Accordingly, the Ground No.2 raised by the assessee is allowed. Addition made u/s.68 of the Act in respect of unsecured loans - HELD THAT:- AO did not resort to make any verification of the evidences filed by the assessee by way of issuing notice u/s 133(6) of the Act to the lender company. In this scenario, the only logical conclusion that could be derived is that the assessee company had duly discharged its onus by furnishing all the requisite documentary evidences proving the three necessary ingredients of Section 68 of the Act and that the ld. AO had not drawn any adverse inference on the same. In view of this, we direct the ld. AO to delete the addition made. Ground raised by the assessee is allowed.
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