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2015 (10) TMI 167 - AT - Income TaxUnexplained unsecured loan and interest thereon - genuineness of transaction and creditworthiness of the company was not proved - CIT(A) deleted the addition - Held that:- Assessee has raised loan of ₹ 10 lakh by way of three cheques during the month of January, 2003. These cheques have been debited in the bank account of the CSR Electronics Pvt. Ltd. CSR Electronics Pvt. Ltd. is being assessed to income tax and it has confirmed having made the payment. The Assessing Officer’s only allegation as emerging from the assessment order is that there is a cash deposit in the bank account of the CSR Electronics Pvt. Ltd. We are of the view that only that cannot be a ground for making the addition and treating the cash credit as unexplained credit. There is no bar against any person on depositing cash in his bank account. Deposit of cash in the bank account can raise a doubt in the mind of Assessing Officer and on that basis, he is supposed to carry out further investigation to take issue to the logical end. This loan is reflected in the books of the CSR Electronics Pvt. Ltd. Further the bank statement of CSR Electronics Pvt. Ltd. reflects that there are various debits and credits through cheques. Assessing Officer’s allegation is that there is a deposit of cash in the bank account of the creditor but we find that all the money has not been deposited in cash. In fact there are cash withdrawals from the bank account. The assessee company had produced confirmations. The evidences in support of the loan were filed that this advance was received from CSR Electronics Pvt. Ltd. and the same has accounted for in its books of account. The creditor company was being assessed independently to income-tax. In view of this, there is no reason to draw adverse inference against the assessee company unless there is something other material to demonstrate that the transaction entered into by the CSR Electronics Pvt. Ltd. are not genuine or are accommodation entries. Without carrying out investigation to the logical end and finding out anything adverse in such investigation, the Assessing Officer cannot come to a conclusion that the credit received by the assessee company is not genuine. There is no allegation of any accommodation entry or there is any statement by any of the person that CSR Electronics Pvt. Ltd. has indulged into accommodation entries. The assessee company has discharged its onus by filing the necessary confirmation, copy of income tax return and copy of bank account. The assessee company has also paid interest and deducted TDS. In view of these facts the CIT(A) was justified in deleting the addition and we uphold the order of the CIT(A). - Decided in favour of assessee.
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