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TMI Blog2022 (4) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The assessee used to first withdraw cash from Bank and then the excess cash withdrawal was deposited in the Bank A/c of the assessee. Thus, the source of the cash deposits was out of the amount withdrawn from the Bank as and when needed and the excess cash withdrawal was re-deposited in the Bank A/c. Neither AO nor CIT(A) has given any findings relating to any defect or discrepancy in respect of the above explanation and evidences furnished by the assessee. The entire order is based on certain enquiries conducted by Investigation Wing. When in his opinion the said money did not belong to the assessee then addition cannot be made in the hands of the assessee as his unexplained income. In view of this, we do not find justification on the part of the lower authorities in making the additions and confirmation made by the AO. Disallowance of interest expenditure - contention of assessee has been that it is the case of the assessee that the assessee is engaged in the business of taking and giving loan on interest and earned interest income - HELD THAT:- AO has taken into consideration the interest income shown by the assessee, however, has failed to given credit/interest expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. and the Ld. C.I.T.(A) both have erred in having disallowed the interest expenses of ₹ 1,43,190/- claimed u/s.57 of the Act only on irrelevant consideration and without considering the loan confirmations and computation of income filed before them. 5. That, as the order of Ld. C.I.T.(A) on the above issues suffer from illegality and is devoid of any merit, the same should be quashed and your appellant be given such relief(s) as prayed for. 6. That, the appellant craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds. 2. The assessee has revised the Ground No.3 as under: That on the facts of the case and in law the lower authorities erred in relying on the Inspector's Report and the enquiry conducted by the learned AO during assessment without affording an opportunity to the assessee to examine the Inspector's Report and the material gathered by the AO in the course of his enquiry u/s 142(2) of the Act, thus skipping the mandatory intermediary step prescribed u/s 142(3) of the Act and that being so additions made are bad in law and against the principles of natural justice. Gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Bank Account No. 00032010039670, being maintained by one Sanju Shukla. On the same date, ₹ 3,85,000/- was found to have been credited into the bank a/c of Sanju Shukla from the OBC Brabourne Road bank account A/c No.00032010006790 of Shriram Tibrewal. Only after the credit into this account of Sanju Shukla, did the funds get credited, immediately into the accounts of the assessee. The AO therefore held that the fund movement from Shriram Tibrewal to Sanju Shukla and then to the assessee on the same date, cannot be considered as a loan transaction as claimed by the assessee. The Assessing Officer, therefore, observed that the transactions established that the assessee was a front of investment and routing of funds for Shriram Tibrewal and in reality was a Benamidar of Shriram Tibrewal. The, AO, further observed that each such credit into the account of the assessee necessitated categorical explanation and clarification and therefore examination under oath of the creditors was necessary to extract the truth of the alleged loan transactions. The AO did not appreciate the loan confirmation and the Bank Statements of all the parties on the ground that the assessee did not produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltimately held that the money belonged to one Shri Shriram Tibrewala. At this stage, it is pertinent to note that there are three requirements to prove the loan transactions : (i) identity of the creditors (ii) creditworthiness of the creditors (iii) genuineness of the transactions. In this case, the Assessing Officer himself has traced the identity of the creditors. He has further also traced the source of the money credited into the account of the assessee. The only allegation now remains about the genuineness of the transactions. The allegation of the Assessing Officer is that the assessee is an intermediary to route unaccounted money from Shri Shriram Tibrewala to some other persons. Under such circumstances, when it is not the case of the Assessing Officer that the loan credits is the unaccounted income of the assessee, then the same cannot be added into the income of the assessee u/s 68 of the Act. On the other hand, the case of the assessee is that the assessee is primarily engaged in the business of advancing and taking loans/advances. The main income of the assessee is interest income from loans and advances given. Interest has also been paid by the assessee on lo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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