TMI Blog1996 (10) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... ain the assessment was made under s. 143(3) on 31st March, 1987. The AO while making the said assessment had, inter alia, disallowed the assessee's claim for deduction in respect of interest expenditure amounting to Rs. 7,815. The assessee preferred appeal against the said assessment order in which the disallowance of interest expenditure was challenged apart from challenging various other additions and disallowances. The AAC, New Delhi, vide order dt. 16th Nov., 1987 restored back the issue relating to disallowance of interest on loan to tune of Rs. 7,815. The AAC observed in the said order that the ITO has disallowed interest on loan on the ground that details of borrowed capital for business purposes as also supporting evidence regarding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion. The burden lies on the assessee to prove the genuineness of the cash credits, on the facts of the present case, the assessee has failed to discharge. The Dy. CIT(A) ought to have confirmed the addition of Rs. 46,000. 7. The learned counsel for the assessee supported the order of the Dy. CIT(A). Apart from this the learned counsel also submitted that confirmations of these creditors were duly furnished before the AO. Copies of such confirmations have also been submitted in the compilation presented before us. Some of the deposits(sic) are existing income-tax assessees. Most of these credits were received by cheques. Interest to few of them have also been paid by cheques. The genuineness of the cash credits in question was not disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition of Rs. 46,000 cannot be validly made in the second innings of the assessment proceedings particularly in view of the fact that this issue was not the subject-matter of the assessment order passed under s. 143(3) nor the subject matter of the appeal decided by the AAC. 10. Apart from this, I have also gone through the copies of confirmations of the various creditors as well as the letters given on behalf of the assessee to the ITO. The assessee was a partner in the firm M/s Photo Circuit (India) which was dissolved on 30th Sept., 1980. The assessee had 50 per cent share in the said firm. From 1st Oct., 1980, the assessee took over the running business of the said firm and continued the said business as its proprietor. The deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the year by three different cheques and once Rs. 67 was paid in cash. Her full address was also mentioned in the confirmation. A perusal of the written submissions submitted before the Dy. CIT(A) at p. 32, inter alia, reveals that pass-book of Shri R.C. Gupta and Smt. Sneh Lata Gupta were also produced before the Dy. CIT(A). (d) Smt. Madhu Gupta made a total deposit of Rs. 5,000 and Rs. 7,000 by two cheques Nos. 656601 and 656695. Several debits in her account reveal that payments towards interest was made to her in various instalments by cheques on different dates. (e) Shri R.C. Gupta made a deposit of Rs. 5,000 by cheque No. 910287 on 26th Oct., 1980. He is an existing income-tax assessee. The permanent account number has al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, such findings given by the AAC were only in relation to disallowance of interest expenditure of Rs. 7,815 which was restored by that order. The AO, therefore, could not travel beyond that point and, therefore, no addition in respect of unexplained cash credit could be validly made by him. Apart from this, the facts discussed hereinbefore indicate that the credits in question relate to petty amounts. Some of those depositors are existing assessees. Interest payments have been made to most of them by cheques. Confirmations of all of them except one were found in the paper-book. Even on merits, the addition made by the AO was not justified. The view taken by the first appellate authority deleting the said addition of cash credit is, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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