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TMI Blog2015 (2) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... be urged is with respect to the addition ofRs. 8.75 lakhs made by the Assessing Officer (AO) - which had been upset by the CIT (Appeals) but directed to be restored by the Income Tax Appellate Tribunal (ITAT). 2. The brief facts for deciding the question are that the assessee is a Non Banking Financial Company (NBFC) which had obtained a license from the Reserve Bank of India for the said business activity. The AO, in his order, had added back the sum ofRs. 8.75 lakhs for the Assessment Year (AY) 1999- 2000. The assessee had advancedRs. 1.4 crores to M/s. Escorts Limited as an inter-corporate deposit and reported interest income for the previous year. For AY 1999-2000, however, its books and returns indicated that the entire amount had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt with the concept of income and has held that Income-tax is a levy on income. No doubt, the IT Act takes into account two points of time at which the liability to tax is attracted, viz., the accrual of the income or its receipt; but the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in bookkeeping, an entry is made about a 'hypothetical income', which does not materialize. Where income has, in fact, been received and is subsequently given up in such circumstance that it remains the income of the recipient of income, even though an entry to that effect might, in certain circumstances, have been made in the books of accounts. &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee as to the absence of interest for the proportionate period in A.Y. 1999-2000 was unconvincing, regarding directing addition of amount. 5. We have considered the submissions of the parties. The CIT(Appeals) took into account not only the additional evidence (especially the letter which was doubted by the ITAT) but also the fact that the AO did not make any enquiry. Significantly, there was a remand directed by the CIT (Appeals) in the course of which apparently, the AO made no attempt to hold further enquiries. In the absence of any concrete material, and having regard to the circumstances that the assessee in fact maintained the mercantile system of account, the failure of the AO to exert himself and requisition the books of accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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