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TMI Blog2021 (2) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... ue Unaccounted interest income - addition made by Ld. A.O on the basis of seized document BS-28 observing that the alleged interest income is received by the assessee on monthly basis on cash loan given - as per assessee there was no cash loan given and all the transactions were through account payee cheques which have been duly accounted in the books - CIT(A) deleted the addition - HELD THAT:- AO has picked up transactions which have narration as interest received in cash, however, did not discuss about the interest portion received through cheques. The interest portion received through cheques is also not recorded in books of appellant, if the AO has treated interest received in cash as undisclosed interest income they why the interest received through cheques is not charged to tax. The one and only reason for not making addition on account of interest received through cheque was that the interest has been actually received by the lender and not by the appellant. Thus, the AO was not justified in making additions on assumption and presumption basis - DR failed to rebut the finding of Ld. CIT(A) by placing any material in its favour and thus we find no reason to interfere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct on 30.11.2018 assessing income at ₹ 1,92,70,500/- adding unexplained investment u/s 69 r.w.s. 115BBE at ₹ 1,86,00,000/- and unaccounted interest income at ₹ 2,03,610/-. Aggrieved assessee preferred appeal before Ld. CIT(A) and partly succeeded. 4. Now the Revenue is in appeal before the Tribunal against the finding of Ld. CIT(A) deleting the addition of ₹ 1,85,72,100/- and ₹ 2,03,610/-. 5. Ld. Departmental Representative vehemently argued supporting the order of Ld. A.O and contended that the seized material was showing clear nexus of the cash loan given by the assessee. 6. Per contra Ld. Counsel for the assessee along with placing reliance on the findings of Ld. CIT(A) as well as submissions made before the first appellate authority submitted that the assessee is a finance broker and earns income from brokerage for arranging loans on behalf of lender and borrower. The business was founded by the father of the Karta in the year 1965 and has been consistently carried on by the family. To substantiate this fact reference was made to the statements given during the course of search wherein the assessee has clearly admitted of carrying out busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd receives brokerage on the transactions so happening between the two. 9. Ld. A.O. has referred to the seized document BS-28 on the basis of which the assessee has been alleged to have given cash loans. When the assessee was show caused for making addition u/s 69 of the Act, it was submitted during the assessment proceedings that the allegation is not correct because the transactions with the details mentioned in BS-28 were written on the request of the borrower which are mostly from outstation and who requested to arrange finance for them. Cheque details in front of the transaction these are post dated cheque details taken by the assessee from the borrower if the finance is arranged. All the transactions mentioned in these documents are with regard to the loan given by the lenders and received by the borrower. However these submissions of the assessee were not sufficient to convince the Ld. A.O and he made the addition for undisclosed investment u/s 69 of the Act. It is not in dispute that no enquiry whatsoever was made by the Ld. A.O with the concerns/name of persons appearing in the seized document. 10. We further observe that Ld. CIT(A) after considering the facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 paise/hundred. The appellant has maintained a diary for keeping track of these transactions and its brokerage. Further, all the transactions were done through account payee cheques. The appellant has also strongly contented that the addition made by the AO amounting to ₹ 2,03,610/- on account of interest income is merely on suspicion, conjectures and surmises. 4.2.2 I have considered the facts of the case, plea raised by the appellant and findings of the AO. The appellant in order to explain modus operandi of the business submitted that the business of financing brokerage is an ancestral business of the appellant. The business was started by Late Shri Mahendra Kumar Jain in the year 1965 along with Shri Dilip Jain and Shri Hemant Jain and the business continued till the year 2012. Thereafter Shri Dilip Jain and Shri Hemant Jain got separated and Shri Dilip Jain along with his two sons Shri Mikesh Jain and Shri Rishab Jain continued the business in the name of MRJ Group from the year 2012-13. The parties wishing to borrow money usually approach the appellant and the appellant according to their requirement finds a prospective lender. Similarly, the parties having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such as receipt of loan, repayment of loan, interest received and TDS deducted on interest. Appellant has filed copies of confirmations of M/s Agrawal Cotex, M/s Shree Annapurna Ginning Factory and M/s Shiv Shakti Trading Co. On perusal of the evidences filed by the appellant it is also observed that no amount was given in cash and also the interest paid was through cheques directly to the lender by the borrower. Appellant has provided various details such as name and. address of both lender and borrower, PAN no in few of the cases, further few of the details such as cheque no and bank details are also mentioned in the impugned diary, however, the AO except putting baseless blames on the appellant did not brought any corroborative evidence which could prove his allegations worthy. The appellant has clearly explained that the interest as well as principle was paid directly to the lender by the borrower and appellant was just a match maker according to the needs of both lender and borrower and earned his commission income which is duly recorded in books of accounts and has been duly taken into consideration before filing return of income. Thus, the AO except his theory of assum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me reflected cash transactions and were outside books of account _ Revenue, thus, made additions under section 69 on ground that outgoings recorded in A-3/A-5 diaries were assessee's money which was unexplained - Assessee's case was that assessee was only a finance broker and money reflected in diaries A-3 and A-5 belonged to others i. e. borrowers/lenders finance brokerage on such lending and borrowing in no case funds were brought to books of assessee _ Whether since onus cast on revenue under section 69 to establish that outgoings belonged to assessee had not been discharged, deeming provision of section 69 could not be invoked in instant case - Held, yes Further Hon'ble ITAT CHANDIGARH BENCH 'A' in the case of ACIT vs V.Kishore Lal Balwant Rai [2007] 17 SOT 380 (CHD.) has held as under:- Section! 58BD, read with section 158BC, of the Income-tax Act, 1961 _ Block assessment in search cases - Undisclosed income of any other person _ Pursuant to a search conducted at premises of a dalal (finance broker), a red bound bahi was seized - Statement of dalal was recorded to ascertain nature of entries contained in bahi _ Dalal explained that bald contained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record by calling for necessary information from the various parties whose names are mentioned in the seized document, the case of the revenue becomes weak. Further in the paper book assessee has filed ledger account of various parties and the names of most of them are also appearing in the seized document BS-28 and these confirmation accounts are placed at page 79 to 114 and clearly reveals that there were regular transactions with these parties through account payee cheques with regard to the loan given by the lenders and received by the borrowers and the repayment there after. No evidence have been brought on record that any of these parties have accepted to have taken loan in cash from the assessee. 12. In these given facts and circumstances of the case and respectfully following the judicial pronouncements referred herein above, we find no reason to interfere in the finding of Ld. CIT(A) deleting the addition of ₹ 1,85,72,100/-. In the result Ground No.1 of Revenue is dismissed. 13. As regards Ground No.2 of the revenue deleting the addition of ₹ 2,03,610/- made by the Ld. A.O on account of unaccounted interest income, we observe that this addition was made b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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