TMI Blog2015 (2) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... in the light of the CBDT Circular dated 20.8.1969, after giving the assessee proper and sufficient opportunity to establish that the fixed deposits mobilized during the earlier years were utilize for the construction of the hospital building. - Decided in favour of revenue for statistical purposes. Unexplained cash deposit found to be made by the assessee in his bank account - Held that:- Before us, the learned counsel for the assessee has submitted that besides pointing out the mistake in the amount of cash deposit taken by the Assessing Officer, explanation as regards to the source of the cash deposit of ₹ 1,56,000 made in the bank account with DCB Bank was also offered by the assessee before the CIT(A). He has contended that the learned CIT(A) however, has failed to consider said explanation and urged that the matter may therefore be restored to the file of the Assessing Officer for verifying the explanation of the assessee as regards the cash deposit of ₹ 1,56,00 made in the bank account. Since the DR has not raised any objection in this regard, we restore this issue also to the file of the Assessing Officer for deciding the same afresh after giving the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he loans taken form Punjab National Bank during the year under consideration, which were claimed to be utilized for repayment of fixed deposits mobilized in the earlier years for the purpose of construction of hospital building The construction of the hospital building was stated to be undertaken over a period of time from 1998 to 2007 for which the funds required were claimed to be raised by mobilsiing the fixed deposits. The said deposits were claimed to be repaid in the year under consideration from the loans availed from Punjab National Bank and interest paid on the loans so availed from Punjab National Bank was claimed to be expenditure deductible under S.24(b) under the head income from house property . In this regard, the assessee was called upon by the Assessing Officer to prove the nexus between the construction activity and the fixed deposits mobilized. In the absence of any books of account maintained by the assessee or any other evidence produced in support, the Assessing Officer held that the assessee could not establish any direct nexus between the value addition made to the building and the fixed deposits mobilized. He therefore, disallowed the deductions claimed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case, as I could see, there is no denial by the Assessing Officer that the appellant has repaid the original loans taken from private parties from the new loans taken from the banks. The Circular No.28 of the C.B.D.T. referred to above also clearly authorises allowing of interest on the borrowed funds being utilized for repayment of the original loan taken for the purpose of construction of the capital asset. The balance of the amount of loan was utilized for making improvement of the hospital building and the deposit was with the hospital. Both were for the purpose of receipt of rent and, therefore, the same is allowable as a deduction. 5. Aggrieved by the order of the learned CIT(A), Revenue has preferred this appeal before the Tribunal. 6. We have heard the arguments of both the sides and perused the relevant material on record. It is observed that the claim of the assessee for deduction on account of interest under S.24(b) was allowed by the learned CIT(A) relying on the CBDT Circular No.28 dated 20.8.1969, wherein it is clarified by the CBDT that if the second borrowing has really been used merely to repay the original loan taken for the acquisition or construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2007-08 which is already decided by us in the foregoing portion of this order. Following our conclusion drawn for assessment year 2007-08, we set aside the order of the learned CIT(A) on this issue and restore the matter to the file of the Assessing Officer for deciding the same afresh as per the same direction given for assessment year 2007-08. The relevant grounds of the assessee on this appeal are accordingly treated as allowed for statistical purposes. 9. The remaining issue in appeal of the assessee for assessment year 2008-09 as raised in ground No.4 relates to addition of ₹ 15,60,000 made by the Assessing Officer on account of cash deposit found to be made by the assessee in his bank account treating the same as unexplained, which is sustained by the learned CIT(A) to the extent of ₹ 1,56,000. 10. During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee has made a deposit of ₹ 15,60,00 in cash in his bank account with DCB Bank on 4.7.2007. Since the assessee could not offer any satisfactory explanation as regards the source of the said cash deposit, the Assessing Officer treated the same as unexplaine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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