TaxTMI 
TaxTMI 
2025 (2) TMI 1782
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....022. The grounds taken by the revenue read as under:- 1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law. 2. The Ld.CIT(A) erred In deleting the addition of Rs. 2,04,52,883/- made towards unexplained credit u/s.68 In respect of cash deposits in bank account of the assessee. 2.1 The CIT(A) erred in accepting the assessee's explanation that an amount of Rs. 1,74,52,883/- was out of redemption/realization of jewel loans by comparing the outstanding gold loans on 31/03/2020 and 01/02/2021, without appreciating that the assessee has not furnished details of borrowers, date of loan, date of redemption, mode of receipt etc to substantiate that the cast, is ac....
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....4-03-2021. During search, certain incriminating books and documents were found and seized. The physical cash was found for Rs. 25.32 Lacs as against book balance of Rs. 5.29 Lacs. The cash of Rs. 20 Lacs was seized. Shri D.Ramgopal (Manager) admitted that interest income was not recorded properly in the books and accordingly, he made admission of Rs. 75 Lacs over and above regular income. Subsequently, the return of income was subjected to scrutiny in accordance with law. In the show-cause notices, the assessee was directed to explain the source of cash of Rs. 20 Lacs. 3.2 The assessee stated that cash found was on account of additional interest income earned during the year and entire cash found was only business funds of the assessee a....
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.... AO on the ground that the assessee did not furnish documentary evidences. The gross interest receipts in cash were stated to be for Rs. 70.20 Lacs which was accepted by Ld. AO. The cash withdrawals were stated to be for Rs. 30 Lacs. The same was rejected by Ld. AO on the ground that the assessee did not explain the reasons for withdrawals and re-deposit of cash. The explanation for cash accumulation for Rs. 6.40 Lacs was also not accepted. Finally, out of aggregate cash deposits of Rs. 285.70 Lacs, the explanation was accepted for Rs. 70.20 Lacs and the remaining amount of Rs. 215.49 Lacs was added as unexplained cash credit u/s 68 r.w.s. 115BBE and the assessment was framed. Appellate Proceedings 4.1 The Ld. CIT(A), in para 6.2.5, n....
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....ledge jewellery and take loans in cash. Upon repayment of loan with interest, the pledged jewellery would be redeemed by the pledgers. The increase in jewel loan balance represents fresh disbursals where decrease represents redemption / realization. The inflow and outflow of cash is quite normal and inevitable in the business. The opening jewel loan for Rs. 714.54 Lacs was in line with the amount disclosed in the audited financials as on 31-03-2020. On 01-02-2021, outstanding jewel loan balance was for Rs. 540.01 Lacs which was not disputed. Thus, there was reduction for Rs. 174.52 Lacs which implies net realization of jewel loans. Therefore, the explanation of the assessee was to be accepted. Further, the assessee was having sufficient cas....
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....he assessee. Therefore, the addition of Rs. 20 Lacs was also deleted. Aggrieved, the revenue is in further appeal before us. Our findings and Adjudication 5. From the facts, it clearly emerges that the assessee is engaged in the business of pawn broking which is primarily conducted in cash. The assessee was lending loans against pledging of gold jewellery. The borrowers would pledge jewellery and take loans in cash. Upon repayment of loan with interest, the pledged jewellery would be redeemed by the pledgers. The increase in jewel loan balance, as rightly held by Ld. CIT(A), would represent fresh disbursals where decrease would represent redemption / realization. The finding of Ld. CIT(A) is that the assessee was having opening Jewels....