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TMI Blog2013 (8) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... fit derived by the assessee from interest free deposits could be taken into consideration for determination of fair rental value. 2. Assessee, an individual, filed his return of income on 29-11-2008 declaring total income of Rs. 1,14,78,820/-. Assessment was finalised by the Assessing Officer (AO) on 27-12-2010 u/s.143(3) of the Income Tax Act,1961(Act) determining total income of the assessee at Rs. 1.75 Crores. 3. The First Ground of Appeal is about deleting the addition made by the AO on account of un-explained cash credit amounting to Rs.22 lakhs. During the assessment proceedings, AO found that assessee had deposited cash on as many as 12 occasions in the month of April 2007 in his bank a/c in HSBC Bank and Standard Chartered Bank. AO directed the assessee to explain the source of cash deposited in the said banks. After considering the submissions of the assessee dated. 04-11-2010 and 16-11-2010, AO held that the assessee had made drawings of Rs.37.99 lakhs during the Financial Year (FY) 2006-07 and Rs.37.43 lakhs during the FY 2007-08, that assessee required a substantial amount for house-hold expenses, that withdrawals for both the AYs were almost in the same range, that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason for withdrawal and redeposit of the money was to purchase a plot of agricultural land by the assessee at his native place. We find that Page No. 19 of the PB is about the plot of land that was to be purchased in Surat District, whereas before the AO and CIT(A) assessee submitted that land was to be purchased in Kutch District of Gujarat. The said paper talks about receipt of Rs.2 lakhs from the assessee by one Shri Mohan Bhai Narotham Bhai Patel. This un-dated plain-paper document is accompanied by extracts of 7/12. We are of the opinion that from these papers do not prove anything. If the withdrawals for both the years are compared it becomes clear that they are of the same range. In these circumstances, the claim of the assessee that a sum of Rs. 16 lakhs were deposited out of the withdrawals made in the earlier AY. cannot be accepted in absence of some positive evidences. 3.4. In tax-matters, liability to pay taxes is decided on pre-ponderances on probabilities - evidence required in the criminal cases do not decide the taxation matters. The cash -dealings of the assessee for the year under consideration are against normal human behavior. As per the settled law of taxation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered the notional interest on these deposits to be a part of rent receivable as an additional benefit which had accrued to the assessee in the form of interest free deposits. AO directed the assessee to file explanation in this regard and after considering his reply, he held that the state of affairs shown by the assessee was not of real nature, that assessee was enjoying the fruits of interest free deposits on which he would have required to pay interest if he would have borrowed the same from the bank/market. Accordingly, relying upon the decisions of McDowell &Company Ltd (154 ITR 148) and Juggilal Kamlapat (73 ITR 702) delivered by the Hon'ble Supreme Court, he concluded the assessee was not showing real income based on the benefits derived from the said properties. AO further relied upon the orders of the ITAT Mumbai in the case of M/s. Tivoli Investment and Trading Co. P. Ltd., (ITA No. 3269/Bom/1993 and 3009/Bom/1994 dt. 30-06-2003). He also relied upon the decision of Apar Ltd, Chem Mech. P. Ltd (83 ITD 427) and Baker Technical Services P. Ltd., (30 DTR 1) to support his contention that benefit derived by the assessee from interest free deposits could be taken into conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it had been categorically held that notional interest could not form part of actual rent as contemplated by Section 23(1)(b) of the Act, that the actual rent was higher than the municipal valuation had to be taken as ALV. Addition made by the AO amounting to Rs.38.28 Lakhs to the ALV made by the AO on the basis of notional interest was deleted by him. 6. Before us, DR relied upon the order of the AO. AR submitted that out of seven properties, only two properties of commercial nature and rest were residential properties, that AO had not brought on record any material to prove that properties were capable of yielding earning more rentals, that the security deposit was Rs. 64.45 Lakhs, that assessee had received advance rental of Rs. 2.54 Crores from the tenants. He relied upon the cases of JK Investors (SLP No. 5480/2001 before Hon'ble Supreme Court) and Asian Hotels Ltd., (ITA No. 794/2007) delivered by Hon'ble High Court of Delhi. He also referred to the case of Reclamation Realty India Pvt. Ltd., delivered by the ITAT Mumbai vide ITA No. 1411/Mum/2007 in this regard. 7. We have heard the rival submissions and perused the material put before us. It is found that assessee was co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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