TMI Blog2004 (6) TMI 253X X X X Extracts X X X X X X X X Extracts X X X X ..... th June, 1999, and his statement was recorded. In the statement, Anoop Gupta admitted to have advanced Rs. 41,000 to the assessee during the financial year 1996-97 but the date and month he could not tell. As regards to the source of Rs. 41,000 he stated that a sum of Rs. 30,000 was received from his mother, Smt. Swatantar Kumari and a sum of Rs. 12,010 was lying with him at home which he deposited in the bank and out of the same gave a cheque of Rs. 41,000 to the assessee. When he was asked to explain the source of Rs. 12,010 lying at home, he stated that Rs. 12,000 was lying with him as his earnings from tuition work but no evidence to show the tuition work was furnished. According to the AO the depositor was only a student and there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven by the creditor by account payee cheque. It was further submitted that the assessee had proved identity of the depositor and the genuineness of the transaction as well as the creditworthiness because the amount was received by cheque. The statement of the depositor was also recorded. He also produced copy of the bank account of Anoop Gupta and referred to the entry of deposit in his account dt. 13th Aug., 1996. It was stated that the entry of Rs. 30,000 and Rs. 11,510 both were transfer entries. Out of these cheque of Rs. 41,000 had been issued. It was submitted that Rs. 11,510 were received by Anoop Gupta from M/s Ved Prakash Naresh Kumar with whom the depositor was maintaining account. In support of that claim a copy of account receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat had been deposited in the bank account along with Rs. 30,000, out of which Rs. 41,000 had been given to the assessee, then no addition is called for. Accordingly, this issue is restored back to the file of AO. 9. The next issue vide ground No. 4 relates to addition of Rs. 9,030 added by the AO as interest @ 18 per cent p.a. on Rs. 86,000. 10. The facts related to this issue in brief are that the assessee advanced a sum of Rs. 86,000 to Ram Sahai Sudershan Kumar, Kaithal, on 7th Sept., 1996, and no interest was charged on that amount. The assessee claimed deduction of interest of Rs. 92,137 in the P L a/c against the claim in last year at Rs. 20,553. The assessee was asked to explain the increase in interest expenses. In response t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Ram Sahai Sudershan Kumar, the partners of whom helped the assessee in rainy days. Reliance was placed on the following case laws (i) Shree Digvijay Cement Co. Ltd. vs. CIT (1982) 26 CTR (Guj) 184 : (1982) 138 ITR 45 (Guj) (ii) 131 ITR 219 (Cal) (sic) (iii) Asstt. CIT vs. Paharpur Cooling Towers (P) Ltd. (1993) 44 ITD 540 (Cal) (iv) Mrs. Maya J. Daryani vs. IAC (1994) 50 TTJ (Del) 510 (v) ITA No. 7436/Del/1992, Tribunal (Del) (2002) 11 Rep. 514 Decision of Tribunal, Chandigarh Bench 'A' in the case of Dy. CIT vs. Shivalik Agro Poly Products Ltd. ITA No. 285/Chd/1994, asst. yr. 1991-92. 13. In his rival submissions, learned Departmental Representative for the Revenue strongly supported the orders of authorities belo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar for Rs. 86,000. It is also noticed that in the present case, the AO had not established the nexus between borrowed funds and the amounts so advanced as interest-free. Therefore, he was not justified in presuming that the assessee had diverted interest-bearing funds to interest-free advance. In that view of the matter, we are of the opinion that the learned CIT(A) was not justified in confirming the addition made by the AO. We, therefore, delete the same. 15. The last ground of the appeal relates to sustenance of addition out of addition made by the AO on account of household expenses. 16. The facts related to this issue in brief are that assessee had withdrawn a sum of Rs. 22,202 on account of household expenses. The AO estimated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial is not available on record. In the instant case, the AO had not brought any material on record how and in what manner the amount of Rs. 4,000 p.m. were required to meet the needs of assessee's family. It seems that the addition made by the AO is purely on estimate basis. Learned CIT(A) also had not given any cogent reason while sustaining the addition of Rs. 20,798 out of addition made by the AO. 22. Considering the entire facts and to meet the ends of justice and the size of the family of the assessee it would be fair and reasonable if the expenses per month are estimated at Rs. 3,000 instead of 4,000 estimated by the AO. Against these expenses, the assessee had shown withdrawal of Rs. 22,202 and a sum of Rs. 5,000 had been disal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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