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TMI Blog2012 (11) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... h regard to an addition of Rs 15 lakhs made by the Assessing Officer on account of unexplained cash credits under section 68 of the Act, which has since been deleted by the Commissioner of Income-tax (Appeals). 3. In the course of assessment proceedings, the Assessing Officer noticed that the assessee had raised unsecured loans from two persons, namely, Smt Rashmi Soni of Rs 10 lakhs and Smt Smita Soni of Rs 5 lakhs for which assessee failed to furnish any confirmations. Accordingly, the Assessing Officer treated the same as unexplained cash credits assessable under section 68 of the Act, and thus, an addition of Rs 15 lakhs was made to the returned income. 4. In appeal before the Commissioner of Income-tax (Appeals), assessee prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and report of the Assessing Officer dated 18.2.2011, which has been relied upon by the Commissioner of Income-tax (Appeals), was also submitted in the course of hearing before us. 7. We have carefully considered the rival submissions. In our considered opinion, the Commissioner of Income-tax (Appeals) made no mistake in holding that having regard to the report of the Assessing Officer dated 18.2.2011 there did not remain any ground for retaining the addition made under section 68 of the Act. Ostensibly, before the Assessing Officer assessee could not furnish the requisite confirmations from the two creditors and accordingly the credits amounting to Rs 15 lakhs in the name of Smt Rashmi Soni and Smt Smita Soni were held to be unexplained wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer for the reason that the corresponding unsecured loans raised from Smt Rashmi Soni and Smt Smita Soni amounting to Rs 15 lakhs were found to be unexplained. The Commissioner of Income-tax (Appeals), after having accepted the genuineness of such loans and deleting the addition made under section 68, also proceeded to set aside the disallowance of interest expenditure of Rs 1,96,242/-. In the earlier paragraphs, we have affirmed the order of the Commissioner of Income-tax (Appeals) deleting the addition made under section 68 of the Act and consequently, his action of setting aside the disallowance of interest is also hereby affirmed. Thus, on this aspect also Revenue fails. 9. The last Ground in this appeal relates to an addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly for the reason that the same was given as security against the loans so raised; that in any case, such bearer cheque was never presented for payment and, it could not be presumed that any repayment of loan had taken place. The assessee also submitted that the Assessing Officer was wrong in stating that the loans in question were taken in cash or that the same was repaid in cash. Accordingly, it was pointed out that provisions of section 69D of the Act were inapplicable. The Commissioner of Income-tax (Appeals) has since deleted he addition by holding that provisions of section 69D of the Act could not be invoked in the present case, inasmuch as the documents found in the course of search on Shri Shriram H Soni were not 'hundis' and, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer is sought to be justified. 12. On the other hand, the learned Representative for the respondent assessee has primarily placed reliance on the discussion made by the Commissioner of Income-tax (Appeals) in the impugned order which is to the effect that the facts and circumstances of the case did not justify invoking of section 69D of the Act. 13. We have carefully considered the rival submissions. Section 69D of the Act prescribes that where any amount is borrowed on a hundi from, or any amount due thereon is repaid to, any person otherwise than through an account payee cheque drawn on a bank, the amount so borrowed or repaid shall be deemed to be the income of the person borrowing or repaying the amount aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined as to whether the material so found could be called a hundi for the purposes of section 69D of the Act. After a detailed discussion, the Tribunal came to the conclusion that the borrowings in question did not fall within the scope of section 69D of the Act, which covers only borrowings on hundis. In this case, the Commissioner of Income-tax (Appeals) has concluded that promissory note in question is in the same language and form, as was considered by the Tribunal in the case of Himalaya Distributors (supra) and, therefore, he concluded that having regard to the material in question, section 69D of the Act could not be invoked, since the documents found were not 'hundis'. Before us, the learned Departmental Representative has not referr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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