9911796707
TMI Blog2022 (12) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... hed before the authorities below, we are of the considered opinion that the CIT(A) has estimated and adopted the effective interest rate at an higher side. Accordingly, we direct the AO to adopt 50% of effective interest rate i.e., 26% (52x0.5) of gross cash deposited shall be considered as income and 50% of estimated interest has been given as relief to the assessee and would include therein any claims on account of peak credit. As a result, out of the cash deposit of ₹.2,17,49,200/-, 26% being ₹.56,54,792/- is sustained as income in the hands of the assessee and the assessee get a relief of ₹.1,60,94,408/-. Appeal filed by the assessee is partly allowed. - I.T.A. No. 1381/Chny/2018 - - - Dated:- 18-11-2022 - Shri V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has only facilitated the sale of timber in his relative business and has received commission on the same and has no income in such a scale as passed by the Assessing Officer which was partly confirmed by the ld. CIT(A). It was further submission that the assessee has filed all relevant details such as bank statements of other parties to prove that the cheques have been discounted by the other parties and the cash was handed over to the assessee. Confirmation letters were also provided to the authorities below. 4. On the other hand, the ld. DR fairly conceded that the relief granted by the ld. CIT(A) may be confirmed. 5. We have heard both the sides, perused the materials available on record and gone through the orders of autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 04.03.2011 was issued to Shri. N.K. Nawas for Rs. 1 lakh, which was discounted by the recipient for Rs. 99,560/-. In the meanwhile, on 07.03.2011 the assessee has issued another cheque to Shri. N.K. Nawas for Rs. 1 lakh, which was also discounted for Rs.99,560/- and cash of Rs. 1 lakh was withdrawn and claimed to be paid back to the assessee. 6. The cheque discount / interest of Rs.440/- on Rs. 1 lakh comes to 0.44'% for just three days. This would mean that monthly discounting charges of 4.4%; (0.44 x 30 / 3), which would become annualize to 52.8% per annum. It is illogical and beyond test of human probability that somebody would borrow money at such a high rate of interest and is then able to return the whole amount to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he may get some business out of them. Otherwise, the assessee has not charged any commission for these transactions from the third parties. 7. In his earlier submission dated 14/12/2015, party wise break up of cash deposits has been given which is as under: Name Amount (Rs.) N.K. Navas 65,43,000/- Empee Saw Mill 43,64,000/- MP Ashraf 10,57,000/- VH Haneefa 12,00,000/- NK Noufal 13,68,000/- KK Wood Works 28,60,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uses to which such huge cash withdrawals have been made. The question arises as to whether all this is merely a game of lending money at high interest rates or is it some crude measure of money laundering. Even considering the fact that money has frequently been returned to be deposited again and again in appellant's bank accounts, the larger idea of - a) interest amount due b) final balances due from loan takers to appellant cannot be ruled out. How are the loan takers able to bear such high effect rate of interest. The AR has repeatedly sung only one tune and has nothing new to bring forward by way of facts. The ARs has, in addition, asked that in the light of the repeated cash deposits, only the peak cash deposit is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing Rs.91,34,664/- is sustained as income in the hands of the appellant and the appellant gets a relief of Rs. 1,26,14,536/-. 6. We have gone through the observations and findings of the first appellate authority, wherein, the ld. CIT(A) estimated and adopted 80% of effective interest rate i.e., 42% (52 x 0.8) of gross cash deposited is considered as income of the assessee. Balance 20% of estimated interest has been given as relief to the assessee and would include therein any claims on account of peak credit. As a result, out of the cash deposit of ₹. 2,17,49,200/-, 42% being ₹.91,34,664/- is sustained as income in the hands of the assessee and the assessee was granted relief of ₹. 1,26,14,536/-. 6.1 Considering ..... X X X X Extracts X X X X X X X X Extracts X X X X
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