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2023 (7) TMI 379 - AT - Income TaxAddition u/s 68 - unexplained cash credits - introduction of Share Capital, Share Application money and unsecured loans - onus to prove - HELD THAT:- We find that the assessee has simply filed documents but has not given any explanation to the adverse observations in respect of the bank statements. Even the CIT(A) has ignored the specific findings of the AO that cash were deposited immediately before issuing the cheque. Merely because the lenders / applicants are promoters / directors of the company would not discharge the assessee from initial onus of proving the credit entries in his books of account. Assessee has grossly failed in discharging the initial burden and the CIT(A) erred in accepting the submissions of the assessee without verifying the same. All the additions made u/s. 68 confirmed. – Decided against assessee. Addition u/s 36(1) - disallowance of interest expenses - interest on borrowed capital but has also given interest free loans and advances – as per AO all the advances are on account of capital expenditure and the assessee has used its interest bearing funds for the purpose of creating capital assets, therefore, the interest expenditure is of capital nature and made the addition disallowing the proportionate interest charged to P & L account - HELD THAT:- We find that the assets were put to use prior to the claim of interest. It is also an undisputed fact that the borrowed capital were utilized for giving advances to the suppliers of the milk which cannot be on capital account. No error or infirmity in the findings of the CIT(A). The ground dismissed. Undisclosed investment in land - assessee had failed to substantiate the reason of difference between circle rate of the land in question and price actually paid to the seller – as contended that section 50C is not applicable to the assessee as there is no sale of capital asset - HELD THAT:- CIT(A) was convinced that the relevant provisions applied by the AO are not applicable on the facts of the case and no other evidences have been brought on record to show that the assessee has paid consideration over and above the registered value the additions were accordingly deleted. Appeal of the revenue is partly allowed.
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