TMI Blog2021 (9) TMI 1192X X X X Extracts X X X X X X X X Extracts X X X X ..... a Pvt. Ltd.(VVCIPL) - AO found that assessee had borrowed the sums for interest and paid the interest on the loans taken by the him - HELD THAT:- In the instant case, there is no doubt that the assessee had incurred the interest expenditure and also received the equal amount of interest from VVCIPL, which was offered to tax. Thus, there was no excess expenditure incurred by the assess on account of amounts given to VVCIPL and hence no addition is called for. Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. Cash deposits made during demonetization period, which was added back to income u/s 69A - HELD THAT:- CIT(A) observed that the assessee is maintaining regular books of accounts and the deposits were made out of the book balances and therefore, following the decision of Karthik Constructions [ 2018 (3) TMI 39 - ITAT MUMBAI] the Ld.CIT(A) held that there is no case for making the addition, accordingly deleted the addition. Deposits made in respect of proprietary concern - HELD THAT:- Total cash deposits in respect of Housing Development business for the whole year and the entire cash deposits made in the bank acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tune of ₹ 17,67,246/- u/s 40(a)(ia) of the Income Tax Act, 1961 (in short Act ). During the assessment proceedings, the Assessing Officer (AO) found that the assessee has debited the sum of ₹ 58,90,819/- under various heads. The assessee was requested to furnish the details of TDS made on expenditure claimed in P L account. Though the assessee has furnished the details, the details of TDS made under various heads of expenditure were not placed before the AO. Therefore, the AO disallowed 30% of such expenditure which worked out to ₹ 17,67,246/- and added back to the income. 4. Against the order of the AO, the assessee went on appeal before the CIT(A) and submitted that the assessee required to deduct TDS on commission and painting works and the rest of the heads of expenditure TDS does not attract, since, the payments were less than the threshold limit for deduction of TDS. The Ld.CIT(A) observed that the assessee had deducted the TDS on commission and painting works and accepted the submission that the remaining heads of expenditure are not subjected to TDS, therefore, deleted the addition and allowed the appeal of the assessee. 5. Against which, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. 9. Against which the assessee went on appeal before the CIT(A) and the Ld.CIT(A) found that the assessee advanced the amounts to VVCIPL on which interest paid to the extent of ₹ 31,06,036/-. The assessee also received the equal amount as interest from VVCIPL and also deducted the TDS and the same was offered under the head income from other sources. Since the interest payments and receipts were of the equal amounts, no addition is warranted, accordingly deleted the addition. 10. We have heard both the parties and perused the material placed on record. In the instant case, there is no doubt that the assessee had incurred the interest expenditure of ₹ 31,06,036/- and also received the equal amount of interest from VVCIPL, which was offered to tax. Thus, there was no excess expenditure incurred by the assess on account of amounts given to VVCIPL and hence no addition is called for. Therefore, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. 11. Ground No.4 is related to the cash deposits of ₹ 2,21,24,156/- made during demonetization period, which was added back to income u/s 69A of the Act. During ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worked out to be ₹ 36,81,700/- for the whole year. The Ld.CIT(A) observed that the assessee is maintaining regular books of accounts and the deposits were made out of the book balances and therefore, following the decision of Karthik Constructions in I.T.A. No.2292/Mumbai/2016 dt. 23.02.2018 of coordinate bench of ITAT Mumbai, the Ld.CIT(A) held that there is no case for making the addition, accordingly deleted the addition. 13. The next issue is with regard to the deposits made in respect of proprietary concern M/s Venkata Durga Enterprises, which is a retail out let of petrol and diesel products under the dealership of HPCL at Kothavalasa. The Ld.CIT(A) after verification of bank account observed that the cash deposits made during the demonetization period was only ₹ 83,00,122/- as against the sum of ₹ 1,69,46,956/- worked out by the AO in the bank account of 62183479808/-. The Ld.CIT(A) also observed that the AO s finding of not revealing the bank account to the department was also incorrect, since, the bank account No.62183479808 was found reported in the balance sheet of the assessee as on 31.03.2017 and the closing balance of ₹ 33,101/- was match ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no reason to interfere with the order of the Ld.CIT(A) and the same is upheld. This view is supported by the decision of ITAT Mumbai in the case of Karthik Constructions and the decision of ITAT Bangalore in the case of Teena Bethala in I.T.A. No.1383/Bang/2019, accordingly, the order of the Ld.CIT(A) is upheld and no interference is called for. 16. With regard to cash deposits in respect of Sri Venkata Durga Enterprises, the AO found that the cash deposits during the demonetization period was ₹ 1,69,46,956/-, whereas, the Ld.CIT(A) has given a finding that the cash deposits during demonetization was only ₹ 83,00,122/- after verification of the material placed before him. For the sake of clarity, we extract para No.4.5.7. of the order of the Ld.CIT(A) which reads as under : 4.5.7. I have carefully considered the issue and the facts of the case. In the first place the appellant had disclosed the bank account 62183479808 in his books of account. The completed P L account consists of the turnover of M/s Sri Venkata Durga Entrerprises. The Assessing Officer s observation that the account is concealed is far from facts of the case. I have perused the balance she ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer must have the details from banks during demonetization period. The Assessing Officer was also not correct in determining the cash deposits as on 31.03.2017 at ₹ 1,69,46,956/- instead of ₹ 5,91,82,387/- leave alone the cash deposits during the demonetization period standing at ₹ 83,00,122/-. In all fairness and in the circumstances, there is no case for Assessing Officer to invoke section 69A of the Act to bring the so called deposits of ₹ 1.69,46,956/- and tax u/s 115BBE of tire Act. Accordingly, the Assessing Officer is directed to delete the addition of ₹ 1,69,46,956/-. 16.1. In the instant case, there is no dispute that the assessee is running Petrol and Diesel retail outlet and he is the dealer of HPCL and the Govt. of India has permitted during the demonetization period to accept the specified bank notes in the case of petrol bunks. There is no dispute that the cash deposits made were relatable to sales and duly accounted in the books of accounts and the same were deposited in the bank account. The Ld.DR did not place any material to show that the source of cash deposits were unexplained. As per section 69A if the assessee is fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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