TMI Blog2022 (6) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... ujarat High Court in the case of Fakir Mohmed Haji Hasan [ 2000 (8) TMI 44 - GUJARAT HIGH COURT] held that when (unexplained) income cannot be classified under any one of the heads of income under Section 14, it follows that the question of giving any deductions under the provisions which correspond to such heads of income will not arise. As it is seen that it is a settled proposition of law that no deduction /allowance is allowable against such unexplained cash credit which is considered as income of the assessee. In the present facts, during the course of assessment, the AO made an addition of ₹ 4,73,10,000/- on account of unexplained cash credit of unsecured loan u/s 68 - AO omitted to disallow the interest paid on the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction of interest of Rs. 11,70,726/- without appreciating that the appellant had not claimed deduction of the same while preparing return of income. The appellant craves permission to add, alter, amend or withdraw any ground or grounds of appeal either before or during the course of Rearing of the appeal. 3. The brief facts of the case are that the return of income was filed by the assessee for the captioned assessment year declaring a total income of ₹ 2,35,60,943/-. The scrutiny assessment was finalised by the AO on 31.03.2016 determining total income at ₹ 10,45,01,940/-. The Principal CIT on verification of records found, that while finalising the assessment order, the AO made an addition of ₹ 4,73,10,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee is in appeal before us against the order passed by Principal CIT. Before us, none prepared on behalf of the assessee. The Ld. DR argued that since the unsecured loan on which interest has been claimed by the assessee has itself been held to be unexplained income of the assessee under section 68 of the Act, during the course of assessment proceedings, consequentially, the interest thereon should have been disallowed, which the AO failed to do during the course of assessment proceedings. Hence, the Principal CIT has not erred in fact and law in holding that the assessment order is erroneous and prejudicial to the interests of the Revenue. 5. We have heard the arguments of the Ld. DR and perused the material on record. It is a settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se no source is disclosed at all on the basis of which the income can be classified under one of the heads of income under section 14 of the Act, it would not be possible to classify such deemed income under any of these heads including 'income from other sources' which have to be sources known or explained . When the income cannot be so classified under any one of the heads of income under section 14, it follows that the question of giving any deductions under the provisions which correspond to such heads of income will not arise. If it is possible to peg the income under any one of those heads by virtue of a satisfactory explanation being given, then these provisions of sections 69, 69A, 69B and 69C will not apply, in which event ..... X X X X Extracts X X X X X X X X Extracts X X X X
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