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TMI Blog2017 (12) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... on of tax by claiming various expenditure under the garb of carrying on the business. However, where the assessee has paid the said interest to the related party, the said amount cannot be disallowed on the ground of non deduction of tax at source. We are allowing the plea of assessee on this limited issue and this decision of ours shall not be used as precedent. The ground of appeal No.6 raised by the assessee is thus, allowed. - ITA No.763/PUN/2015 - - - Dated:- 11-12-2017 - MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM For The Appellant : Shri Sanket Joshi For The Respondent : Shri Vivek Aggarwal ORDER PER SUSHMA CHOWLA, JM: The appeal filed by the assessee is against order of CIT(A)-1, Nashik, dated 26.03.2015 relating to assessment year 2009-10 against order passed under section 143(3) of the Income Tax Act 1961 (in short the Act ). 2. The assessee has raised the following grounds of appeal:- On facts and in law, 1] The learned CIT(A) erred in confirming the addition on account of unexplained cash deposits of ₹ 6,99,500/- in saving account No.337, Bank of India. 2] The learned CIT(A) erred in confirming the addition on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement recorded under section 131 of the Act on 13.11.2011, the assessee explained the source of capital introduced to the extent of ₹ 1,90,000/- out of accumulated agricultural income since last 15 to 20 years, ₹ 1,40,000/- loan taken in cash from Shri Namdeo Raghunath Harle and ₹ 1,70,000/- from Shri Sampat Ranu Kale. The assessee was asked to produce the above individuals. However, they were not produced by the assessee and the Counsel for the assessee pointed out that since the assessee had met with an accident, the said persons could not be produced. On verification of the transactions relating to introduction of capital, the Assessing Officer found that the Savings Bank Accounts held were not disclosed by the assessee neither in the written submissions nor during the course of hearing the assessee had disclosed the said bank account. The total cash deposits in the said bank account were ₹ 6,99,500/-, out of which sum of ₹ 5 lakhs was introduced as addition to the capital account. Since the assessee had failed to explain the sources, the said sum of ₹ 6,99,500/- was added as income from undisclosed sources in the hands of assessee. Further, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer did not accept the plea of assessee in respect of past savings as the assessee was regularly depositing cash in the bank account. With regard to loans taken, the Assessing Officer rejected the claim of assessee and observed that sum of ₹ 6,99,500/- was nothing but assessee s own amount treated as undisclosed income. In respect of deposits in Loknete Dattaji Patil Sah. Bank totaling ₹ 10,05,200/-, the Assessing Officer recorded written statements of all the concerned lenders who were friends and relatives of the assessee. The said persons also produced their sources of income and stated that the cash amount or loan was given to the assessee for the purpose of fertilizers, pesticides, agricultural equipment in syndicate way but the same could not be executed and the amount of loan was taken back on 11.07.2009 by cash. The Assessing Officer however, was of the view that where the bank account has been detected and not declared by the assessee and explanation of the assessee was not accepted. The CIT(A) in view of the remand report and after considering the rejoinder of assessee in this regard has upheld the order of Assessing Officer. The explanation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank of India and Loknete Dattaji Patil Sah. Bank and the assessee claims that it has borrowed funds from different persons. However, perusal of the documents filed by the said persons reflect that they had landholding of about 4 acres and were not in a position to make the said advances. 9. We have heard the rival contentions and perused the record. The first issue which is raised by way of grounds of appeal No.1 to 5 is against the cash deposits in the bank accounts of assessee. The assessee was the sole proprietor of HPCL dealership, wherein the assessee had maintained books of account and also disclosed the said bank accounts and the business income as declared by the assessee has been accepted except for minor disallowances made on account of certain expenses. However, while making enquiries during the course of proceedings, the Assessing Officer noted that it was capital introduced of ₹ 5 lakhs. While making investigation, the Assessing Officer found that the assessee has maintained bank account with Bank of India in which there were various cash deposits totaling ₹ 6,99,500/-. The Assessing Officer show caused the assessee to explain the source of cash deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 131 of the Act on 13.11.2011 and thereafter on 20.08.2013. The assessee also explained that the source of cash accumulated by him was out of his agricultural produce in respect of which, he produced 7/12 extracts which are placed at page 62 of the Paper Book. He also produced the medical certificate in respect of road accident of the assessee, which is placed at page 73 of the Paper Book. The copies of statement recorded of the assessee are placed at pages 43 to 61 of the Act. In view of the above said facts and circumstances, where the assessee has produced the evidence of his own landholdings and the agricultural operations being undertaken by the assessee, then the savings of ₹ 1,90,000/- and ₹ 1,40,000/- merits to be accepted in the hands of assessee. The said explanation cannot be rejected on the ground that the assessee has deposited cash on different accounts in his bank accounts. The assessee also explained other deposits i.e. loan from two parties; the said persons were produced before Assessing Officer in remand proceedings and they also established their respective sources. The said two bank accounts did not relate to the business activities of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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