2022 (2) TMI 281

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....unds of appeal raised by assessee are as follows:- "1. The Ld. Commissioner of income-Tax (Appeals) has erred in law and facts in confirming the addition of deposits received totaling to Rs. 47,15,000/- which have been treated as unexplained cash credit u/s. 68 of the Act. 2. The Ld. Commissioner of Income-Tax (Appeals) has erred in law and facts in confirming the disallowance of interest expenses of Rs. 1,00,000/- paid in respect of the aforesaid deposits. 3. The Ld. Commissioner of income-Tax (Appeals) has erred in law and facts in confirming the disallowance of brokerage expenses of Rs. 1,33,000/- paid for raising the aforesaid deposits. 4. The Ld. Commissioner of income-Tax (Appeals) has erred in law and facts in confirming the ....

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.... In this order, the Co-ordinate Bench inter alia observed as follows:- "14. Before proceeding further, certain facts emanating from the record before us need special mention. In his statement recorded u/s. 131 of the Act on 01.12.2012, the assessee had explained that since past 10 years he is employed in China from where he is drawing salary of Rs. 10.80 lacs (in Indian Currency). It is also seen that the assessee has specifically stated that he is not maintaining any bank account in China and was drawing salary in cash. It is also found that in Indian rupees, the total expenditure of the assessee was 6.50 lacs. These facts show that the assessee was a man of small means. This also shows that since past 10 years, the assessee is doing job....

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.... 20,000/- each. Out of the amounts so deposited in the bank account, the cheques of the identical amounts are issued to the beneficiaries. The said payments are reflected as part of the loans and advances in the balance sheet of the assessee. It is submitted that the cash so deposited in the bank account represents the cash belonging to the parties to whom the cheques are issued since the said parties are the ultimate beneficiaries of the amounts, in order to show the said transaction as genuine financing transaction, the assessee also periodically receives interest from the parties which are deposited in the bank account and the cash is repaid back to them. It is submitted that the entire transaction representing loan given and the cor....

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....sessee can only be subjected to tax on the commission income for arranging the said transactions. 15. A perusal of the afore-stated information for remand report substantiates the facts given at the time of the statement of the assessee recorded on 01.12.2012. 16. The A.O. was well aware of the fact that the impugned transactions were done by account payee cheques which means that the money has flown from one identified bank account to another identified bank account. Nothing prevented the A.O. to trace the beneficiary bank account but we find that the A.O. has not done any such exercise. No doubt, the burden is on the assessee but considering the nature of the transactions in the light of the statement of the assessee, the A.O. should ....