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2020 (3) TMI 593 - AT - Income TaxAddition on account of deposit of cash in the bank account - reopening of assessment - HELD THAT:- Assessee has furnished his PAN, driving license for opening the bank account. The bank opening form was also signed by him in the capacity of the proprietor as confirmed by the bank. We also find that the cases for the assessee were reopened by the AO u/s 148 for the assessment years 2006-07 and 2007-08 on the reasoning that the assessee has deposited cash in the impugned bank account which has escaped assessment. AO accordingly made the addition to the total income of the assessee in the respective assessment years. AR before us has not brought anything on record suggesting that the impugned addition made by the AO for the assessment years 2006-07 and 2007-08 has been challenged before the higher forum. But the learned AR before us has placed the copies of the assessment order. Thus in the absence of such information, it is transpired that the orders of the AO for the assessment years 2006-07 and 2007-08 have reached to its finality. Thus we can safely conclude that the impugned bank account belongs to the assessee. Availability of opening balance of cash in hand - HELD THAT:- Assessee has utilized the amount of cash deposits for some commercial activities. Moreover the revenue has not brought anything on record suggesting that the amount of cash deposits was utilized by the assessee either for investment purposes or it was used to meet the personal expenses. As such, in the given facts and circumstances, we are of the view that the amount of cash deposit cannot be treated as income in the entirety. Thus, we are of the considered opinion that justice shall be served to the assessee and the revenue if some percentage of profit of the cash deposit is treated as income to bring the end to the ongoing dispute. Accordingly, we direct the AO to treat 20% on average basis of cash deposit as income of the assessee. We are taking the basis of 20% of the cash deposit as income of the assessee from the profit and loss account filed by the assessee for different years. Interest expenses incurred in the CC bank account - HELD THAT:- onus lies on the assessee to justify based on documentary evidence that such interest expenses was incurred in connection with the business. But there was no documentary evidence filed by the assessee suggesting that the interest expenses incurred on borrowing were in connection with the business. Therefore we hold that the assessee cannot be allowed the claim for the deduction of such interest expenses under the provisions of section 36(1)(iii) of the Act. Hence the ground of appeal of the assessee is partly allowed.
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