TaxTMI 
TaxTMI 
TaxTMI 
2003 (7) TMI 259
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....4% p.a. on the basis of seized material. The contention of the assessee before the AO was that he was charging the interest at 18 per cent and there was nothing to show that higher rate of interest has been charged. It was sated that there were only one or two slips, which indicated rate of interest at 24 per cent. The AO observed that in the course of search, large number of slips were found tagged with the pawned, jewellery showing names of the pawnees, advances made and interest charged. According to him, the paper slips tagged clearly indicated rate of interest at 2 per cent per month, the AO cited the names of five persons and again the names of three persons in the case of another sister-concern M/s Subhash Chander & Sons carrying on the same business. The assessee also produced one pawnee before the AO in support of his claim. However, the AO was of the view that the market rate of interest ranged from 2 per cent to 3 per cent per month. She also relied upon a case of Shri Om Parkash and others, Nawanshashr. She, therefore, estimated the rate of interest at 24 per cent per annum and made the addition of Rs. 1,64,573. 4. Aggrieved by the order of the AO., the assessee carrie....
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.... are in appeal. 5. The grievance of the assessee is that the CIT(A) was not justified in estimating the rate of interest at 21 per cent as against 18 per cent applied by the assessee, while the Department is aggrieved against the action of the CIT(A) in reducing the rate of interest from 24 per cent to 21 per cent. 6. The learned Departmental Representative while supporting the order of the AO vehemently argued that in the slips found during the course of search, rate of interest was mentioned as 2 per month, therefore, the AO was justified in estimating the interest by applying the rate of interest at 24 per cent per annum. He further submitted that the learned CIT(A) has reduced the rate of interest without bringing out any material on record. He, therefore, submitted that the order the CIT(A) may be set aside. 7. Shri Sadhir Sehgal, Advocate, the learned counsel for the assessee, while appearing for the assessee, argued that the assessee is maintaining regular books of accounts where 18 per cent rate of interest has been recorded and no defects in such maintenance of books had been noticed as mentioned by the CIT(A) in his findings. Shri Sudhir Sehgal, Advocate, the learned c....
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....am 25-6-1994 1,000 1.5% Second Chart 1. Harbhajan Singh 8-4-1994 1,200 2% - 2. Sheru Ram 23-11-1993 700 1% 2% 3. Sohan Lal 12-8-1993 1,000 1.5% 2% 4. Satya 25-3-1994 2,500 1.5% - 5. Santokh Singh 28-3-1994 500 1.5% - 6. Manohar Lal 18-5-1992 1,600 Nil - 7. Giano 17-2-1994 1,000 1.5% - 8. Surinder pal 11-5-1994 800 1.5% - 9. Mohan Singh 8-9-92 450 1.0% - 10. Giano 3-5-1994 1,200 Nil - 11. Viddya 23-5-1994 1,000 1.5% - 12. Harvinder Kaur 23-6-1994 2,500 1.5% - 13. Amar Nath 3.5.1994 1,500 1.5% - 14. Gurmaj Kaur 10-7-1994 1,000 1.5% - From the above charts, it would be clear that in 18 slips, the rates mentioned is 1.5% whereas only four such slips mentioned rate of 2 per cent. It is also apparent from the above charts that in 8 slips, no interest rate has been mentioned whereas in two slips, rate of interest mentioned is at 1 per cent. At the time of hearing Shri Sudhir Sehgal, Advocate, the learned counsel for the assessee, explained that no uniform rate of interest is possible because if a person is closely connected and is a past acquintance, at times, even no interest was charged. It ....
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....at the entry was on account of gift received from one Shri N.C. Handa to the tune of 4000 pounds. According to the AO the assessee failed to authenticate the genuineness of the gift and also noticed that there was no relation of the assessee with the donor. She also observed that the capacity of the donor has not been proved. According to her, the exercise of the assessee appeared to launder black money through hawala transactions. She also relied on the judgment of the Hon'ble Supreme Court in the case of Shreelekha Banerjee & Ors. vs. CIT (1963) 49 ITR 112 (SC) and also on the judgment of the Hon'ble Punjab & Haryana High Court in the case of Gumani Ram Siri Ram vs. CIT (1975) 98 ITR 337 (P&H). She also relied on another judgment mentioned in the assessment order at page No. 4. Accordingly, the addition of Rs. 1,83,922 was made on account of unexplained cash credit despite the fact that the assessee had filed confirmation in the form of affidavit. 10. In further appeal, the learned CIT(A) deleted the addition for the reasons stated in para 3.1 of the impugned order. 11. Before us, Shri K.S. Talwar, the learned Departmental Representative strongly supported the order of the AO a....