TMI Blog2022 (8) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) on going through the bank statement of Ms. Rashmi Saraf held that cash deposit in her bank account but actually it is a cheque deposit made by the lender. Thus factually the Ld. CIT(A) is not correct in confirming the addition of the advances. We further notice that the assessee has made TDS in the case of Ms. Rashmi Saraf and the loan is also repaid by way of cheque by the assessee through her bank account on 19.09.2015 by way of RTGS. Thus, the assessee has proved the identity, creditworthiness and genuineness of the above loan transactions with proper evidences. Therefore, the above addition of Rs. 10,00,000/- as cash credit is hereby deleted and the grounds raised by the assessee are hereby allowed. - ITA No. 1945/Ahd/2018 - - - Dated:- 13-7-2022 - Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member For the Appellant : Shri Samir Bhuptani, A.R. For the Respondent : Shri V.K. Singh, Sr.D.R. ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- The present appeal has been filed by the Assessee against the order dated 23.08.2018 passed by the Commissioner of Income Tax (Appeals)-6, Ahmedabad, as against the Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Lender it is seen that she has declared income of Rs. 2,62,900/ only. The assessee also filed copy of bank statement of Ms. Rashmi Saraf evidencing advance of the above loans of Rs. 10,00,000/. A perusal of bank statement shows that the loan is advanced on 19.02.2015 by RTGS and cash of Rs. 2,00,000/- is deposited on 18.02.2015. Further, it is seen that cash of Rs. 5,00,000/- is deposited on 30.01.2015. The assessee failed to explain this cash deposits before advancing the above loan. Thus the Ld. CIT(A) held that the lender does not have the creditworthiness to advance loan of Rs. 10,00,000/- and also before advancing above loan , a sum of Rs. 7,00,000/- has been deposited in cash, the source of which was not explained by the assessee and also explained by the lender. Therefore the entire loan of Rs. 10,00,000/- is confirmed as unexplained cash credit in the hands of the assessee. 5. Aggrieved against the same, the assessee is before us raising the Grounds of Appeal are as follows: Ld. AO erred in law as well as on facts in making and Id. CIT(A) erred in law as well as on facts in confirming - 1. Disallowance of interest u/s. 36(l)(iii) of the act of Rs. 2,60,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherein no such disallowances is being made by the A.O. Further closing balance of the said years which eventually becomes opening balance of the year under consideration cannot be subject matter of disallowance for the present assessment year 2015-16 on the addition of Rs. 10,00,000/- as unexplained credit. The ld. CIT(A) wrongly presumed that there was cash deposit of Rs. 7,00,000/- in the bank account of Ms. Rashmi Saraf. But there was a cash deposit of Rs. 2,00,000/- only on 18.02.2015 whereas Rs. 5,00,000/- was deposited on 30.01.2015 is an account payee cheque deposit from HDFC Bank only. That the ld. CIT(A) misread the deposit of Rs. 5,00,000/- as wrongly as a cash deposit and confirmed the entire additions as unexplained credit and also disallowed the interest paid by the assessee to Ms. Rashmi Saraf after making TDS of Rs. 1348. This addition is also not correct in law. 7. Per contra, the Ld. Sr. D.R. Shri V.K. Singh appearing for the Revenue supported the order passed by the lower authorities and pleaded that no further interference and pleaded to dismiss the appeal field by the assessee. 8. We have given a thoughtful consideration and perused the materials availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll nevertheless. However, having held that the assessee did have sufficient interest bearing funds to advance interest free advances to sister concerns, this aspect of the matter is somewhat academic. In a case which an assessee has sufficient interest free funds, to cover the interest free advances, the principles laid down by Hon'ble Supreme Court in SA Builders' case (supra) dealing with governing commercial expediency in advancing interest free advances will not really be relevant. Learned Commissioner (Appeals)'s stand was thus devoid of legally sustainable merits on this aspect as well. 10. For the reasons set out above, we uphold the grievance of the assessee and direct the Assessing Officer to delete the impugned disallowance of Rs 6,32,980 out of interest expenses. The assesse gets the relief accordingly. 8.1. The Hon ble Supreme Court judgment in the case of Reliance Industries reported in 410 ITR 466 which reads as follows: Reliance Industries (SLP 37/2019 dated 02/01/2019) SC (410 ITR 466) Insofar as the first question is concerned, the issue raises a pure question of fact. The High Court has noted the finding of the Tribunal that the in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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