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2022 (10) TMI 847 - AT - Income TaxUnexplained income outside the books of accounts - Addition made to the returned income on account of Undisclosed net income - CIT-A deleted the addition - HELD THAT:- As observed that this amount has already been offered to tax by the assessee in the return of income under the head “other receipts”. Therefore, Ld. CIT(Appeals), in our view has correctly held that the said amount cannot be brought to tax as gross receipts in the hands of the assessee company again, since the same would amount to double taxation of the same receipts. Whether the expenses against the same are to be allowed, or whether it can be inferred from the statement of the Partner of the assessee firm that the said amount represents “net income” of the assessee firm, and accordingly no further expenses my be allowed against the same? - CIT(Appeals) has correctly observed that from the statement recorded of the Partner of the firm, it cannot be inferred that the said amount of ₹ 11 crores represents “net income” of the assessee firm, and therefore, the assessee is not eligible to claim any expenses against the same. Once the position is admitted that the assessee has offered the undisclosed sum in the return of income, and during the course of detailed assessment, the assessing Officer has not doubted the genuineness of expenses claimed in the return of income, then such expenses should be allowed against the undisclosed income offered by the assessee in the return of income. Accordingly, in our considered view, Ld. CIT(Appeals) has not erred in facts and in law in granting relief to the assessee in respect of this addition referred to above. Addition towards interest expenditure incurred - Since the Ld. CIT(Appeals) in the immediately preceding year has accepted the deposits from five companies as genuine and further in the present year, Ld. CIT(Appeals) has also allowed the assessee’s claim of expenditure under section 36(1)(iii) of the Act, with respect to the above interest expenditure, we find no infirmity in the order of the Ld. CIT(Appeals), while granting relief the assessee.
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