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TMI Blog2019 (4) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007-08 and order dated 30.09.2014 in ITA No. 13/13-14 for the assessment year 2010-11, passed U/s.250(6) r.w.s. 143(3) of the Act. 2. ITA Nos.226 & 228/Chny/2015 for the Assessment years 2004-05 & 2009-10:- The assessee has raised several grounds in her appeal however the crux of the issue is that the Ld.CIT(A) has erroneously upheld the order of Ld.AO who had made addition towards interest earned on pro-notes amounting to Rs. 1,75,200/- & Rs. 17,52,000/- for the assessment years 2004-05 & 2009-10 respectively, interest earned on the advances recorded in the computer of the assessee amounting to Rs. 9,99,600/- each for the assessment years 2004- 05 & 2009-10 and interest earned on the investments in bonds and Kisan Vikas patras amounting to Rs. 3,600/- each for the assessment years 2004-05 & 2009-10 and Rs. 30,313/- towards interest earned on the Recurring deposit account amounting to Rs. 3,03,125/- for the assessment year 2004-05, all of which was not accounted in the books of the assessee. 2.1 The brief facts of the case are that, the assessee had filed return of income for the assessment years 2004-05 & 2009-10 admitting total income of Rs. 6,59,870/- & Rs. 6,75,430/- on 01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had claimed that no such advances was extended. The Ld.AO had made such addition of Rs. 9,99,600/- by computing the interest @ 24% on the advances aggregating to Rs. 41,65,000/- for each of the assessment year 2004-05 and 2009-10. On appeal the Ld.CIT(A) confirmed the addition by agreeing with the view of Ld.AO. 2.3.1 Since this Bench of the Tribunal vide order dated 20.03.2019 in ITA No.17/Chny/2014 for the block assessment years 1997-98 to 2002-03 and part of 2003-04 had deleted the addition made on the hands of the assessee towards the advances recorded in the computer which was retrieved during the course of search in the premises of the assessee amounting to Rs. 41,65,000/-, the addition made by the Ld.Revenue Authorities towards interest on the same do not have any legs to stand. Therefore we hereby direct the Ld.AO to delete the addition made in the hands of the assessee amounting to Rs. 9,99,600/- for each of the assessment years 2004-05 and 2009-10. 2.4 The Ld.AO had estimated Rs. 3,600/- as the interest accrued towards the investment in bonds, kisan vikas patras, etc., which was not disclosed. On appeal the Ld.CIT(A) confirmed the order of the Ld.AO. 2.4.1 W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect to interest on pro-notes Rs. 17,52,000/-, interest on advances recorded and retrieved from the computer of the assessee Rs. 9,99,600/-, interest on investments in bonds and Kisan vikas patras Rs. 3,600/- stands deleted. It is ordered accordingly. 3.2 During the course of scrutiny assessment proceedings for the assessment year 2006-07, it was observed by the Ld.AO that there were cash deposits to the tune of Rs. 2,27,000/- in the bank account maintained by the assessee in Standard Chartered Bank, Mylapore branch. Since assessee could not explain the source for the cash deposit, the Ld.AO added the same as unexplained cash credits in the hands of the assessee. On appeal, the Ld.CIT(A) confirmed the order of the Ld.AO because even before him, the assessee could not explain the source of investment. 3.2.1 Even before us at this stage, the Ld.AR did not furnish any explanation towards the cash deposit made by the assessee in her bank account for Rs. 2,27,000/-. Therefore we hereby confirm the addition of Rs. 2,27,000/- made by the Ld.Revenue Authorities for the assessment year 2006-07. 3.3 During the course of scrutiny assessment proceedings for the assessment year 2007-08, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld.CIT(A) upheld the order of the Ld.AO by agreeing with his view. 4.3 At the outset we are not in agreement with the view of the Ld.Revenue Authorities on this issue because of the reason stated in para No.3.3.1 herein above. Further it is pertinent to mention that the Ld. Revenue Authorities has also not verified the claim of the assessee that she had claimed an amount of Rs. 65,719/- as refund. Therefore we are of the considered view that the penalty levied by the Ld.AO invoking the provisions of Section 271F of the Act is not warranted because it is not conclusively proved that the assessee has not filed her return of income. Hence we hereby direct the Ld.AO to delete the penalty levied for Rs. 5,000/- invoking the provisions of Section 271F of the Act. 5. ITA 2880/Chny/2014, Assessment year 2010-11:- The assessee has raised several grounds in her appeals however the crux of the issue is that the Ld.CIT(A) has erred in confirming the order of the Ld.AO with respect to the following additions:- Particulars Amount Interest on pro-notes 17,52,000 Interest on advances recorded in computer 9,99,600 Interest on investments in bonds & kisan vikas patras 3,600 Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from huge advance extend which is disclosed as sundry debtors and that has to be enormous in commensurate with the advance extended . The assessee has also claimed that she is maintaining her books of accounts as per cash system of accounting and her declared sundry debtors is Rs. 2,66,60,775/- from which she has to receive substantial revenue as interest. Therefore it is obvious from the return filed by the assessee that the assessee is maintaining her books of accounts as per cash system of accounting. As per Section 145(1) of the Act, the assessee is entitled to maintain her books of accounts regularly as per cash or mercantile system of accounting. Since the assessee is maintaining her books of accounts as per cash system of accounting we are of the considered view that the addition made by estimating the accrued interest on the sundry debtors by the Ld.Revenue Authorities is not warranted because the same ought to be treated as the income of the assessee in the previous year in which the assessee receives the interest as per cash system of accounting. Hence we hereby direct the Ld.AO to delete the addition made for Rs. 31,99,293/- by estimating the accrued interest on sundry ..... X X X X Extracts X X X X X X X X Extracts X X X X
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