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TMI Blog2021 (2) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... earch operation, which was a rough noting, without considering the documentary evidence filed by the appellant and without bringing any material on record against such documentary evidences filed. Appellant prays such addition confirmed being unjustified/ unwarranted deserve to be deleted. 2. On facts and in the circumstances of the matter the Ld. CIT(A) has grossly erred in upholding the addition made by ld. AO by estimating interest @ 8% on the alleged advances of Rs. 25 lacs stated to have been earned by the appellant without any basis or material on record on assumptions and presumptions. Appellant prays such addition confirmed being imaginative and arbitrary deserves to be deleted. 3. On facts and in circumstance of the matter the Ld. CIT(A) has erred in confirming the action of ld. AO in invoking the provisions of sec 115BBE of the IT Act, 1961." 2. Briefly stated, the facts of the case are that a search and seizure action u/s 132 of the Income Tax Act, 1961 was carried out on 28.7.2016 on the members of Chandra Prakash Agarwal Group of which the assessee HUF is also one of the members. Subsequent to the search, return of income for the year under appeal was filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es stated therein are the probable date of repayment / date of advance / due date of interest payment. As the same was prepared for memoranda purpose, thus the dates mentioned therein were based on the memory of the person who noted the same. In support of the contention that they are recorded in the regular books of accounts, assessee filed the copies of ledger accounts of the party, bank statements of the assessee showing advancing of loan via banking channel, receipt of interest on such loans after due deduction of TDS etc. Further, the assessee had placed on record various documents before Ld. AO and Ld. CIT(A) to counter the finding of the ld. AO alleging the impugned loan to be undisclosed cash loan advanced by the assessee. 5. It was submitted that the impounded paper consists of details of various loans advanced through banking channel by the assessee and the other members of the groups to various people through finance brokers. In the said paper first column is the amount advanced followed by the name of borrower. Thereafter against the names of borrowers certain dates have been noted that denote either the date of advancing the loan or the tentative date of repayment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... single day. Advancing such huge amount of loan by different members of the same family/ group in a single day that too in cash is practically impossible. Moreover, in normal course whenever any advance is made in cash by some group only the name of borrower is noted and no sane person would record the different names of the family members as lender. This clearly shows that the amount were duly recorded in the books of respective family members whose name is appearing as lender. A sheet is enclosed with this written submission at page 11 wherein all entries appearing on the said paper are verbatim copied and at the last one column is added titled as 'Remarks" wherein the date of repayment of loan / periodic interest is mentioned. From the perusal of the same your honors would appreciate the fact that all the dates are very near to the date mentioned on the paper impounded (not more than 8 days) and since the search was commenced on 28.7.2016, the brokers could not contact the assessee to deliver the cheques towards payment of interest / repayment of principal amount and when search was concluded they have visited the assessee and handed over the cheques of interest/ repayment. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber would never be written. 10. Further, the ld. AO has also assumed that these loans have been advanced by the assesse in cash and are different and distinct from the one's reflected in the books of accounts of the assessee even though the same amount of advance is duly reflected in books of accounts. In this regard, it was submitted that such observations of the ld. AO are merely his assumptions and presumptions made purely on suspicion that again lack factual and logical support with any material found as a result of search. On the contrary, the claim of the assesse is clearly backed by both documentary and circumstantial evidences. 11. It was submitted that the loan of Rs. 25,00,000/- advanced by the assessee to Columbus Overseas LLP has been given via banking channel (RTGS) through the regular bank account of the assessee. Further, the interest of such loan have been recorded in the books of accounts on accrual basis and offered for taxation in the return of income year on year. Such interest income has also been received by the assessee via banking channel and after due deduction of TDS on the same. Further, there is no evidence of any other cash loan being advanced by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial, however, slight, is on the income tax authorities and not on the assessee (Bansidhar Onkarmall v. CIT, (1953) 23 ITR 353. 361 (Orissa). 15. It was accordingly submitted that loan of Rs. 25.00 lacs made to Columbus Overseas LLP was advanced by the assessee on 14/08/2015 through regular banking channel. The assessee has duly recorded interest receivable on such loan in the books of accounts and offered the same for taxation. The interest income was received in the regular bank account of the assessee after due TDS. The date mentioned in the paper also contained certain dates which are subsequent to date of search for which also the ld. AO alleged that on these dates cash advance might have been made by the respective individual, which is an impossible proposition made by Ld. AO. On the paper itself the word 'DUE date' is mentioned which is deliberately ignored by the ld. AO. No evidence / material was found as a result of search or brought on record to support the allegation that these entries are cash advanced by the members of the appellant HUF. With the above, it was submitted that the impugned paper found during the course of search was merely a rough paper having rough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s duly been recorded in the books of accounts of the assessee and has been offered for taxation. The same is clearly evident from Form 26AS for AY 2017-18 which reflects the amount of interest paid by Columbus Overseas LLP to the assessee after due deduction of TDS on the same. During the year under consideration, the assessee had received an interest of Rs. 379,062/-from Columbus Overseas LLP which is forming part of the total interest of Rs. 23,24,276/- declared under the head Income from Other sources. Therefore, the assumption of the ld. AO that the assessee has earned and received interest @ Re.1 per hundred per month over and above it is without any basis and solely based on assumptions and presumption. 19. It was further submitted that no cross inquiry or action has been initiated by the ld. AO against Columbus Overseas LLP. The assessee submits that the ld. AO had on record the details of tax deducted by Columbus Overseas LLP in case of the assessee which clearly mentions the TAN of the party. The ld. AO from the TAN of the party could have initiated proceedings against it in respect of receipt of alleged cash loans and alleged payment of interest in cash. However, where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since, in case of Smt. Pooja Agarwal and Shri Chandra Prakash Agarwal it has been established that the date mentioned against the loan amount in the impounded paper is the date of loan advanced to the person whose name has been mentioned in the paper itself with loan amount. Hence the date in other case including assessee itself, it cannot be presumed to be date of repayment of loan. It was accordingly submitted that from the above modus operandi by the assessee, it is revealed that the assessee advances the loan in cheque as well as in cash in same amount to a same person so that the cash amount advanced can be hide by similar loan made through cheque to dupe the department. It was accordingly submitted that amount of Rs. 25 lacs was brought to tax as undisclosed income of the assessee as the same is different from the loan recorded in the books of accounts. Further, on such cash loan advanced by the assessee, the AO has determined interest for 8 month from 27-07-2016 to 31-03-2017 computed @ 12 % per annum at Rs. 2,00,000/-. He accordingly supported the findings of the AO and that of the ld CIT(A) who has confirmed the same. 22. We have heard the rival submissions and purused t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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