TMI Blog2020 (3) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... gned bank account belongs to the assessee. Availability of opening balance of cash in hand - HELD THAT:- Assessee has utilized the amount of cash deposits for some commercial activities. Moreover the revenue has not brought anything on record suggesting that the amount of cash deposits was utilized by the assessee either for investment purposes or it was used to meet the personal expenses. As such, in the given facts and circumstances, we are of the view that the amount of cash deposit cannot be treated as income in the entirety. Thus, we are of the considered opinion that justice shall be served to the assessee and the revenue if some percentage of profit of the cash deposit is treated as income to bring the end to the ongoing dispute. Accordingly, we direct the AO to treat 20% on average basis of cash deposit as income of the assessee. We are taking the basis of 20% of the cash deposit as income of the assessee from the profit and loss account filed by the assessee for different years. Interest expenses incurred in the CC bank account - HELD THAT:- onus lies on the assessee to justify based on documentary evidence that such interest expenses was incurred in connection w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - on the ground that the conditions u/s 31(l)(iii) is not satisfied and the interest belonged to HUF which had not filed Returns of Income. It is prayed that the interest payment of ₹ 55,146/- of cash credit a/c. no. 118 be given deduction if cash credit account no. 118 with Commercial Co-operative bank Ltd. is treated as belonging to individual of H.K. Mistry. On facts and circumstances of the case, the I'd CIT(A)-5 has erred not adjudicating ground no. 4 separately which is as under. On facts and circumstances of the case, the I'd A.O, erred in treating the sum of ₹ 9,56,477/- being cash deposited in cash credit A/c no. 118 with Co-operative Bank ltd, as appellant's unaccounted investments u/s 69 of the IT Act 1961, even though evidences and explanations of sources of cash deposits were furnished to him. The addition is baseless and requires to be deleted. It is prayed that the sources of amount of₹ 9,56,477/- be held as properly explained' and therefore, the addition be deleted. It is prayed that the above ground be separately adjudicated. 5. The appellant craves leave, to add to alter, amend or delete any of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above direction by the learned Additional CIT as discussed above, the AO treated the balance amount of ₹ 9,56,477/- (₹ 13,08,670/- cash deposited minus the transactions carried out by the member HUF amounting to ₹ 352193/-) belonging to the assessee. 3.5 The AO also disregarded the contention of the assessee i.e the opening cash balance of ₹ 8,61,809/- was utilized for the impugned deposit of cash on the reasoning that there was no source of income of the HUF, PAN and ITR etc. In view of the above the AO treated the amount of cash deposit in the impugned bank account for ₹ 9,56,477/- as unaccounted investments under section 69 of the Act and accordingly added to the total income of the assessee. Aggrieved assessee preferred an appeal to the learned CIT (A). 4. The assessee before the learned CIT (A) reiterated his contentions as made before the AO during the assessment proceedings i.e. the impugned bank account belongs to the HUF. The assessee further contended that there were the interest expenses amounting to ₹ 55,146/- against such CC account but he has never claimed the deduction for the same. Accordingly, the assessee further p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the Assessing Officer has correctly considered the amount of ₹ 9,56,477/- as unexplained investments of the appellant under the provisions of section 69 of the Act. The contentions of the appellant that there was opening cash balance in HUF account is not verifiable and, therefore, not acceptable. Therefore, the net addition of ₹ 9,56,477/- made by the Ld.Assessing Officer is hereby confirmed and I hold that the appellant is not entitled to any further deductions on this account. This ground fails. 5.2 Similarly, the learned CIT (A), regarding the contention of the assessee for allowing the benefit of interest expenses, has also disregarded the contention of the assessee by observing as under: 5.2 I Have thoughtfully considered the contentions of the appellant. The interest which is no claimed as a deduction pertains to cash credit account number 118. The claim for interest payment is admissible under section 36(1)(iii) of the Act provided it satisfies the conditions laid down in that section. In the instant case, the appellant has not been able to establish that the borrowings were made for the purpose of business of the appellant. On the contrary, it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 48 of the Act for the assessment years 2006-07 and 2007-08 on the reasoning that the assessee has deposited cash in the impugned bank account which has escaped assessment. The AO accordingly made the addition to the total income of the assessee in the respective assessment years. The learned AR before us has not brought anything on record suggesting that the impugned addition made by the AO for the assessment years 2006-07 and 2007-08 has been challenged before the higher forum. But the learned AR before us has placed the copies of the assessment order which are placed on pages 54 to 63 of the paper book. Thus in the absence of such information, it is transpired that the orders of the AO for the assessment years 2006-07 and 2007-08 have reached to its finality. Thus we can safely conclude that the impugned bank account belongs to the assessee. 8.2 Now coming to the 2nd question about the availability of opening balance of cash in hand for ₹ 8,61,809/-, in this regard we note that the assessee filed cash book of the HUF for previous years from 2005-06 to 2009-10 which are available on record. However, we are not inclined to make any reference to these cash books filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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