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2019 (6) TMI 544

tion was only ₹ 9,687/- and, therefore, the disallowance u/s 14A should be restricted ₹ 9,687/-. However, as pointed out by the learned DR from the order of the Assessing Officer, the amount of exempt income was mentioned by the AO as ₹ 1,49,519/-. Direct the AO to verify the actual amount of exempt income earned by the assessee during the year under consideration and restrict the disallowance u/s 14A to that extent. Ground No. 1 of the assessee’s appeal is accordingly treated as allowed for statistical purpose. Unexplained cash credit - loan received by the assessee as unexplained - HELD THAT:- In the case of Orissa Corporation Pvt. Ltd. [1986 (3) TMI 3 - SUPREME COURT] as held that merely because summons issued to .....

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ear under consideration was claimed to be exempt by the assessee from tax. No disallowance on account of expenditure incurred in relation to the said exempt income however was offered by the assessee. The AO, therefore, worked out such expenditure by applying Rule 8D and since the disallowance so worked out was more than the actual exempt dividend income of ₹ 1,49,519/- received by the assessee during the year under consideration, the disallowance u/s 14A was restricted by the AO to ₹ 1,49,519/-. On appeal, the Ld. CIT(A) confirmed the said disallowance made by the AO. 4. I have heard the arguments of both sides on this issue and also perused the relevant material available on record. The limited contention raised by the learned .....

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tement of the loan creditor, a perusal of which by the AO revealed that there was a huge cash deposit made by the loan creditor in the bank account before issuing cheque to the assessee towards a loan of ₹ 9,00,000/-. The AO also noted that the turnover of the lender company during the year under consideration was only ₹ 16,30,159/-. Keeping in view all these facts and circumstances of the case, the AO held that the creditworthiness of the concerned loan creditor was not satisfactorily established and even the genuineness of the transaction was not proved. He accordingly treated the loan of ₹ 9,00,000/- claimed to be received by the assessee as unexplained cash credit and addition of ₹ 9,00,000/- was made by him to t .....

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pointed out from the relevant documentary evidence in the form of ledger account of the concerned loan creditor and the copy of bank statement that the loan of ₹ 9,00,000/- taken by the assessee during the year under consideration was repaid along with interest during the year under consideration for F.Y. 2013-14. He contended that the loan in question received by the assessee during the year under consideration thus was duly explained by the assessee in terms of section 68 by discharging the primary onus that lay on him and the addition made by the AO and confirmed by the Ld. CIT(A) u/s 68 by treating the same as unexplained cash credit is not sustainable. In support of this contention, he relied on the decision of Hon ble Supreme Co .....

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unts to show that the loan given to the assessee by cheque through proper banking channel was duly reflected in the accounts of the concerned loan creditor. The primary onus that lay on the assessee to prove identity and capacity of the concerned loan creditor as well as to establish the genuineness of the relevant loan transaction thus was duly discharged by the assessee. It is also observed that interest was paid by the assessee on the said loan and deduction claimed by the assessee for such interest was also allowed by the AO. It is observed that the AO still treated the loan in question received by the assessee during the year under consideration as unexplained cash credit u/s 68 for the reason that the notice issued u/s 133(6) to the c .....

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