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TMI Blog2001 (7) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... the following question for the opinion of this court. "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in allowing the interest amounting to Rs. 50,300 on the ground that the loans themselves had not been added earlier?" In compliance with our direction the aforesaid question has been referred for our opinion. The relevant assessment year is 1987 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of Utsav Agarwal and Rs. 35,000 was again lent out to Sterling Corporation by Utsav Agarwal. Similarly, in the case of Nidhi Agarwal the Savings Bank Account No.4634 was opened in Oriental Bank of Commerce on February 20, 1986, and the cash deposit was Rs. 101. On March 18, 1986, Rs. 50,000 was deposited in cash and Rs. 50,000 was withdrawn on the same day by cheque. No explanation was g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his guardian from where he got this money. It appears by mistake the Income-tax Officer has not added this cash credit amount in the hands of the assessee. But he disallowed only the interest of Rs. 10,800 claimed on the loan stated to have been given by these kids who had no source of their own. The addition on account of the interest has been deleted by the Commissioner of Income-tax (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been explained and if by mistake that amount of cash credit has not been added in the income of the assessee that does not mean that the interest should also be allowed. If the Assessing Officer has committed the mistake by not adding the amount of bogus cash credits in the hands of the assessee that does not mean that interest should also be allowed on those bogus cash credits. From the reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the hands of the assessee but has disallowed the interest on that cash credit amount. The addition of interest amount claim should not be deleted for mistake of the Income-tax Officer. In deletion of the addition on account of the interest on bogus cash credits both the authorities have committed the error, holding that interest should not be allowed as deduction. In the result, we answer t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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