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TMI Blog2022 (6) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... 263 without appreciating that the conditions specified in section 263 to assessment were not satisfied at all. 2. The Ld. Pr CIT erred on facts and in law in cancelling the entire assessment order without appreciating that he had no jurisdiction to revise the assessment order as assessment order is subject matter of appeal and appeal was pending before the Commissioner of Income-tax (Appeals) for adjudication. 3. The Ld. Pr CIT erred on facts and in law in holding that the Assessing Officer erred in granting 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the AO without making proper verification of the interest claimed on unsecured loan treated as unexplained cash credit u/s 68 of the Act. The AO did not disallow the interest paid on the unsecured loan treated as unexplained cash credit u/s 68 of the Act, during the scrutiny assessment. The assessment order was therefore cancelled and the AO was directed to examine the matter and make fresh assessment in accordance with law after giving proper opportunity to the assessee. 4. The assessee 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 unexplain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or value of articles not recorded in the books of account or the unexplained expenditure may be deemed to be the income of such assessee. It follows that the moment a satisfactory explanation is given about such nature and source by the assessee, then the source would stand disclosed and will, therefore, be known and the income would be treated under the appropriate head of income for assessment as per the provisions of the Act. However, when these provisions apply because 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' w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponding deductions, which are applicable to the incomes under any of these various heads, will not be attracted in case of deemed incomes which are covered under the provisions of sections 69, 69A, 69B & 69C in view of the scheme of those provisions. 5.2 In view of the above, 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 Rs. 4,73,10,000/- on account of unexplained cash credit of unsecured loan u/s 68 of the Act. However, the AO omitted to disallow the interest paid on the said unsecured loan while finalising the scrutiny assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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