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2017 (12) TMI 1344 - AT - Income TaxUnexplained expenditure based on seized document - Held that:- The assessee was required to produce complete books of accounts and vouchers of M/s Rashiwa International Ltd., so that the Revenue Authorities could reconcile the name of the parties and amount appearing in page No. 6 of Annexure A-1 with the amount outstanding from the relevant parties as on 05/12/1998 in the books of accounts of M/s. Rashiwa International Ltd. Since this exercise of reconciling the amounts appearing in seized documents with the books of accounts of M/s Rashiwa International Ltd. has not been carried out by the lower authorities due to failure on account of the assessee and now before us the learned counsel has assured that all relevant documents shall be produced before the Assessing Officer, if matter is restored to the file of the Assessing Officer. In the circumstances, we are of the view that true facts should come on record for deciding issue-in-dispute judiciously. Thus the fact, whether the amounts appearing in page No. 6 of Annexure A-1 are outstanding debtors of M/s Rashiwa International Ltd., need to be examined thoroughly. Accordingly, we restore the issue-in-dispute to the file of the Assessing Officer for deciding afresh, with the direction to the assessee to produce all the necessary document/evidence in support of its claim. The Assessing Officer may also examine/verify the books of accounts of the parties appearing in page No. 6 of Annexure A-1 of seized documents for cross-verification of the claim of the assessee. Accordingly, the ground No.1 is allowed for statistical purposes. Addition of undisclosed intercorporate deposits (ICDs) - Held that:- Assessee itself has admitted that amount in question are in lakhs, which shows that the assessee is aware of the transactions recorded in the paper and it cannot shift its responsibility onto the Revenue. We also note that the Assessing Officer has not recorded in the impugned assessment order , as which are those seized documents having handwriting similar to the paper in question. In view of the above circumstances, we feel it appropriate to restore the issue in dispute to the file of the Assessing Officer for deciding afresh, with the direction to the assessee to file all documentary evidences in support of its claim that the paper does not belong to the assessee or to whom it belongs, for discharging its onus of rebutting the presumption against the assessee under section 132(4A) Unexplained source of repayment of loan on the basis of Annexure A-40 of seized document - Held that:- to ascertain the facts whether any loans or deposits were taken by the assessee from those parties and subsequently, re- payment thereof if any, inquiry from those parties is essential. In view of the facts and circumstances, we feel it appropriate to restore the matter to the file for Assessing Officer for deciding afresh, with the direction to the assessee to produce intermediary/agent and parties mentioned in the Annexure A-40 before the Assessing Officer. The assessee shall be afforded adequate opportunity of being heard. Accordingly, ground no. 3 of the appeal is allowed for statistical purposes. Disallowance of interest corresponding to the loan utilized for illegal purposes - Held that:- intercorporate deposits of ₹ 1.5 crore has been made out of the packing credit availed by the assessee company for export business. The Ld. counsel of the assessee has not produced any documentary evidence to support its contention that sufficient interest free funds were available with the company for extending intercorporate deposits of ₹ 1.5 crore to the companies of Sri Keshav Bangur. The Ld. counsel also failed to establish that the intercorporate deposit made was a business transaction in regular course. In such circumstances we agree with the finding of the Ld. CIT(A) that the deposit of ₹ 1.5 crore was for non-business purposes and the corresponding interest claimed as expenditure on packing credit limits by the assessee company was not allowable.
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