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TMI Blog2019 (11) TMI 1180X X X X Extracts X X X X X X X X Extracts X X X X ..... r purchase of a plot of land at New Delhi and he has withdrawn cash from time to time from his own savings bank account and since the purchase of land could not materialize, the amount was deposited back in its bank account. The AO had reproduced the following explanation submitted by the assessee as under: "During the captioned Financial Year, the assessee deposited certain amount of money in his Bank account from past savings. The detail of cash withdrawals and deposits for the current financial year and prior two financial years are furnished as Anx. 1. As can be seen from Anx 1, the cash deposits have been made by the assessee from the cash in hand resulting from past savings and cash withdrawals during the captioned financial year. The cash deposits and withdrawals are duly supported by bank statements for the assessee furnished as Anx 2." 4. However, the AO was not satisfied with the explanation given (supra) by the assessee and according to him, the cash deposits remain unsubstantiated by the assessee by filing neither any evidence nor the wealth tax return in respect of the source of cash deposit of Rs. 60,18,000/- and Rs. 10,98,000/-. So, he was pleased to add Rs. 71,16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries in the bank statements, I find that the entries are recorded in the disclosed bank accounts of the assessee which showed that sufficient cash withdrawals were made by the assessee from his bank account to cover the cash deposit." This finding of fact made by the AO after examination of the cash flow statement for the year under consideration as also for the earlier two years after cross verifying it with the entries in the bank statement could not be dislodged by the departmental representative before us. In such a scenario, we are inclined to uphold the action of the Ld. CIT(A) and dismiss the ground of appeal of the revenue. 6. Ground no.2 is against the action of the Ld. CIT(A) in deleting the disallowance made by the AO u/s. 17(3)(ii) of the Act at Rs. 1,65,51,054/-. 7. Brief facts of the case as noted by the AO are that the assessee had shown outstanding loan balance from three companies which according to AO are from companies in which assessee is an employee i.e. director namely in (i) M/s. Rolls Print Co. Pvt. Ltd. Rs. 62,00,449/- (ii) M/s. Rolls Print Graphics Pvt. Ltd. Rs. 2,77,820/- and (iii) M/s. XPRT Engineered Packaging Solutions Pvt. Ltd. Rs. 6,75,054/- total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are taxable as per Rule 3(7)(i) of the Income Tax Rules,1962 (hereinafter referred to as the "Rules"). And that in any case u/s. 17(2)(viii) of the Act, the actual tax on loan provided will depend on the interest rate that the employee pays. In other words, it was also contended that as per the Income Tax Rules, if loans are provided at a rate which is less than the interest rate charged by the SBI, then the employee who receives the loan is deemed to have received the loan at a concessional rate. And, therefore, according to assessee, the extent of "concession" is only the benefit and in any event, the benefit is only taxable and not the entire loan amount which has to be re-paid to the companies. However, the AO did not accept the assessee's explanation and he reiterated his stand that the so called loans given by the three companies termed as interest free loans is disbursed to assessee since he is not only an employee but also a key personnel of these three companies and accordingly, the amount of Rs. 1,65,51,054/- (Rs. 1,78,00,000 - Rs. 12,48,946/-) was held by AO as profit in lieu of salary u/s. 17(3)(ii) of the Act. Aggrieved, the assessee preferred an appeal before the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... *] to the extent to which it does not consist of contributions by the assessee or [interest on such contributions or any sum received under a keyman insurance policy including the sum allocated by way of bonus on such policy. Explanation - for the purposes of this sub-clause, the expression "key Man insurance policy" shall have the meaning assigned to it in clause (10D) of section 10;]" 10. As we noted, the Ld. CIT(A) has made a clear finding of fact that assessee is not an employee of the two companies namely, M/s. Rolls Print Co. Pvt. Ltd. and M/s. Rolls Print Graphics Pvt. Ltd. which finding of fact has not been challenged by the department before us and since the amounts taken has been admitted by the assessee as given by these companies as loan, the question of this amount falling in the ken of section 17(3)(ii) does not arise in the facts as discussed. Moreover, we note that the assessee in subsequent year has repaid the said loan to both these companies. Therefore, the amount which the assessee had taken as loan from these two companies namely, M/s. Rolls Print Co. Pvt. Ltd. and M/s. Rolls Print Graphics Pvt. Ltd. does not attract section 17(3)(ii) of the Act and the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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