9911796707
TMI Blog2009 (9) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... .1 of the appeal in Assessment Year 2005-06 is that the Learned Commissioner of Income Tax(Appeals) erred in deleting the addition of ₹ 4,38,293/- in Assessment Year 2001-02 ₹ 7,71,134/- in Assessment Year 2002-03 ₹ 9,36,950/- in Assessment Year 2003-04 ₹ 9,48.704/- in Assessment Year 2004-05 and ₹ 9,50,627/- in Assessment Year 2005-06 on account of disallowance of interest. 3. The brief facts of the case are that the Learned Assessing Officer observed that assessee claimed interest of ₹ 4,38,293/-and assessee had substantial amount of cash in hand which was never used for the purpose of business. The cash in hand is nothing but unsecured loan taken from others and partner s capital. Since the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... type of payments is not against the expenses or loans or deposits they are not necessarily reflected in the records like cashbook. For such circumstances, cash balance is required. It is stated that there are different branches at different places and cash balances is maintained at such branches for the purpose of routine business. It is also claimed that the partner s capital represents accumulation of profits on which balance interest is being paid. The appellant has not transferred any borrowed funds for any non-business purpose. It is also argued that case balance maintained is always thus for the purpose of business. Keeping in view the above position, the appellant has contented that the disallowance is not justified. 5. It is subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stified and therefore, is deleted. 7. The Learned Departmental Representative supported the order of the Learned Assessing Officer, whereas the Learned Authorised Representative of the Assessee supported the order of the Learned Commissioner of Income Tax(Appeals). 8. We have heard the rival submissions and perused the orders of the lower authorities and the materials available on record. The short issue involved in this ground of appeal is that interest expenditure on amount borrowed were disallowed on the ground that amount borrowed were kept as cash with the assessee and the same was in the opinion of the Learned Assessing Officer not utilised for the business purposes of the assessee. The Learned Commissioner of Income Tax(Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the disallowance of interest of expenditure. Therefore, this ground of appeal of Revenue is dismissed. 9. Ground no.2 of the Revenue s appeal in Assessment Year 2005- 06 relates to deleting the addition made by the Learned Assessing Officer on account of unexplained cash seized from Mumbai Central Railway Station. 10. The brief facts of the case are that on 21.07.2004, the Additional Deputy Commissioner of Income Tax(Inv.), Unit-II (2), Scindia House, Bellard Estate, Mumbai searched a van No.MH-04-5-1298 in which luggage belonging to about 8 to 10 angadias were being transported from their offices situated at Bhuleshwar area to Mumbai Central Railway station. The said van was jointly hired by the various angadias to carry the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. which is the partnership firm. In this firm as sated earlier there are two partners one Mr.Chinubhai Mohanlal Patel and other Mr. Vishbubhai Mohanlal Patel. Mr. Chinubhai Mohanlal Patel one of the partner has instructed us to transfer the said cash to Ahmedabad office. Q.10 Do the firm maintain cash book? If so, pl. give the details of up to what date? A.10 Yes, the cash book has been updated up to 21.07.2004. Q.11 As per the letter which is attached to the cash bundles shows that the letter head has been signed by Rajendra J. Patel. Pl. state the details of Rajendra J. Patel? A.11 Mr. Rajendra J. Patel is working as a manager of Bombay office. (B) A letter dated 10.08.2004 explaining source of cash and documents sent alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... place to another, but no such bharatia was found with the cash. 11. In appeal before the CIT(A) it was argued that reasons given by the Assessing officer as above are totally irrelevant. In fact, the Learned Assessing Officer has nothing to say about the evidences found, explanations submitted and statement recorded at the time of search, which proved beyond doubt that cash was transferred from the cash balance of the Mumbai office therefore, addition made by the Learned Assessing Officer is not justified. Therefore it was submitted to delete the addition of ₹ 20 lacs oblige. 12. The CIT(A) after considering the submissions of the assessee held as under :- 13. We have heard the rival submissions and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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