TMI Blog2011 (8) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... planation about the source of deposit in the creditors account, if not found to be acceptable, then also the addition cannot be made in the hands of the assessee. It may be subjective to the proceedings for inclusion of the amount as income of the depositors from the undisclosed sources or if they are found benami then the real owner can be brought to the tax - Decision in favour of Assessee. Unexplained Cash Deposit - There was a cash deposits in the two bank accounts held by the assessee. The assessee submitted an explanation that the amount deposited in the bank accounts are received from the debtors/client and also cash withdrawals from the bank account of the company which have been accounted for in the books of account - CIT(A) considered them as unexplained cash deposits on the basis of small time gap between the withdrawals and corresponding to cash deposits - HELD THAT:- We hold that the assessee was maintaining books of account and the assessee has submitted an explanation that the deposits in the bank account were out of the cash withdrawals from the bank and cash in hand available with the assessee and also from the advances received from the clients entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 33,55,000/- on account of alleged unexplained cash deposits in the bank account. 3. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. A.O. in making addition of ₹ 81,401/- as loss in trading and has denied to be set off in subsequent years against speculative profit. 4. In any view of the matter and in any case, additions of ₹ 3,10,000/-, ₹ 33,55,000/- and ₹ 81,410/- are bad in law and against the facts and circumstances of the case. 5. That having regard to facts circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of A.O. in charging interest u/s 234B and 234D. 6. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 2. At the outset of the pleadings, the learned AR stated that he is not pressing ground no.3. He also stated that the ground nos.4 6 are general in nature, hence no need for adjudication. In view of this, we dismiss ground nos.3, 4 6. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein there were cash credits in partner s accounts in the books of the assessee firm; the entries were treated as explained; no addition to income was sustained under section 68 of the Income-tax Act. It was held that the assessee cannot ask the creditor whether the amount lent was properly taxed or not. He also relied on the decision of Hon'ble Rajasthan High Court in the case of Aravali Trading Co. vs. ITO, (2008) 8 DTR 199 wherein it is held that once the existence of the creditors is proved, the assessee s onus stands discharged. The disbelieving of the depositors about the source of money cannot be made basis for making addition under section 68 of the Income-tax Act. He also relied on the decision of Gauhati High Court in the case of Nemi Chand vs, CIT, 264 ITR 254. In that case also, the assessee established the identity of the creditors and the onus was treated as discharged under section 106 of the Evidence Act and the amounts could not be included as his income under section 68 of the Income-tax Act even when the assessee failed to show creditworthiness of the sub-creditors. 5. On the other hand, the learned DR relied on the orders of the authorities below. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank accounts held by the assessee with Canara Bank account No.16642 and Indian Overseas Bank account No.1090. The assessee submitted an explanation that the amount deposited in the bank accounts are received from the debtors/client and also cash withdrawals from the bank account of the company which have been accounted for in the books of account. The learned AR submitted that these amounts were duly reflected in the cash book maintained by the assessee and the books of account were produced before the CIT (A) which is evident from the page 5 of the reply submitted before the CIT (A). It was also submitted that the books of account were also submitted before the Assessing Officer on 17.03.2006. It was wellexplained before the authorities below that the money was received from the debtors/client and from the self withdrawals from the bank of the company and had been duly accounted for in the books of account. He also submitted that entry-wise details were submitted before the authorities below which are placed at page no.129 130 of the paper book where explanation regarding each and every entry has been given. The accounts of the assessee were duly audited and as per form 3CD, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these cash into bank as explained by the assessee, there was any other user by the assessee of these amounts and in the absence of that, simply because there was a time gap, the explanation of the assessee cannot be rejected and hence the addition confirmed by the learned CIT(A) is not correct. We, therefore, delete the same. This ground of the assessee is allowed. Assessee has to maintain margins with N.S.E. at short notice and for that ready cash in hand has to be maintained. Since the deposits are from the cash balance available to the assessee in its books of account, therefore, in our considered view, no addition is called for. The addition cannot be made or sustained on the basis that there was time gap between withdrawal and deposits. When cash balance is available in cash book maintained no addition can be made. In view of this factual position, we set aside the orders of the authorities below and allow the ground no.2 of the assessee s appeal. 10. Ground No.5 is against the confirmation of the action of the Assessing Officer in charging of interest under section 234B and 234D of Income-tax Act. Charging of interest u/s 234B is mandatory in view of decision of H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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