These appeals are preferred by assessee against respective orders of CIT(A). Since these appeals were heard together, these are being disposed of by this single consolidated order. We, however, prefer to adjudicate them one by one. 2. Appeal No. 1088/Mum./2002: In this appeal, order of CIT(A) has been assailed on following grounds: 'A. Assessment of Rs. 1,51,25,647 being trade advance received from Standard Vishwas Marble Industries Pvt. Ltd. as deemed dividend income under section 2(22)(e). 1. On facts and in circumstances of case, learned CIT(A) erred in facts and in law in confirming action of Assessing Officer of assessing sum of Rs. 1,51,25,647 out of receipt by way of trade advance from M/s. Standard Vishwas Marble Industries Pvt. Ltd. for goods to be supplied and services to be rendered to them as dividend. 2. addition of Rs. 1,51,25,647 may please be deleted and/or substantially reduced. B. Addition of Rs. 1,76,40,000 in respect of alleged unexplained cash credits of various parties by invoking provisions of section 68 of Income-tax Act, 1961. 3. On facts and in circumstances of case, learned CIT(A) erred in facts and in law in confirming addition of Rs. 1,76,40,000 made on account of alleged cash credits in computation of total income. 4. appellant prays that addition of Rs. 1,76,40,000 may please be deleted. C. Disallowances of Interest Rs. 5,37,635 5. On facts and in circumstances of case, learned CIT(A) erred in facts and in law in confirming disallowance of interest of Rs. 5,37,635. 6. appellant prays that disallowance of interest of Rs. 5,37,635 may please be deleted. D. General 7. Assessing Officer and CIT(A)'s order being contrary to law, evidence and facts of case should be set aside, amended or modified in light of grounds deduced above. 8. appellant craves leave to reserve to itself rights to add, to alter or amend any of grounds of appeal at or before time of hearing and to produce such further evidences, documents and papers as may be necessary.' 3. Apropos ground No. 1, it is, noticed that during course of assessment proceedings, Assessing Officer has observed from copy of account of M/s. Standard Vishwas Marble Industries Pvt. Ltd. (hereinafter called as 'SVMIPL') that assessee had received certain amount from SVMIPL. Having noticed that there were common shareholdings in assessee as well as SVMIPL, Assessing Officer asked assessee to explain as to why payment received from SVMIPL should not be treated as deemed dividend as per provisions of section 2(22)(e) of Income-tax Act. In response to this querry, assessee has stated through its letter dated 9-2-2000 as under: 'Implications of advance received from M/s. SVMIPL during year ended 31-3-1997 vis-a-vis provisions of section 2(22)(e) of Income-tax Act, 1961. At out set, it is submitted that provisions of section 2(22)(e) cannot be invoked for treating advances received from M/s. SVMIPL as deemed dividend income under section 2(22)(e), as assessee-company is not shareholder in that company. Without prejudice to aforesaid, it is submitted that these advances have been received in ordinary course of company's business against specific arrangements made with that company for supply of goods and material viz., marble tiles. These advances were trade advances, received in ordinary course of company's business and same were necessitated on account of course of company's business and same were necessitated on account of fact that due to non-availability of working capital, it was not possible for company to enter into large scale contracts for supply of goods and materials with that company. Thus, advances in question have nexus to its day-to- day business activity with that company and not to common shareholders in both these companies. As stated earlier, assessee-company is not shareholder in said company and, therefore, prima facie, there is no case for invocation of provisions of section 2(22)(e) of I.T. Act, 1961.' 4. Having noticed that there are common shareholders of two concerns and Mr. Kirti Kapadia and Ms. Tanuben Kapadia hold more than 10% of equity shares of M/s. Standard Vishwas Marble Industries Pvt. Ltd. and more than 20% of equity shares of assessee-company, Assessing Officer held that assessee is concern in which shareholders of M/s. Standard Vishwas Marble Industries Pvt. Ltd. holding more than 10% of equity shares, have got substantial interest within meaning of Explanation 3(b) below section 2(22) of Income-tax Act (hereinafter called as 'Act') and as such, provision of section 2(22)(e) are duly attracted. Assessing Officer, accordingly, made addition of Rs. 1,51,25,647 as deemed dividend income under section 2(22)(e) of Act. Assessing Officer has also dealt with second objection of assessee in this regard that advances were made to assessee by SVMIPL in ordinary course of latter's business, for services to be rendered to said company by way of promoting sales of its product and during course of money-lending business. Having noticed that in relevant assessment year gross receipts of SVMIPL were to tune of Rs. 7,80,69,819 out of which only Rs. 4,38,835 was accounted for interest receipts and none of main objects in Memorandum of Association of SVMIPL refer to money- lending activity, Assessing Officer rejected this contention of assessee. next objection raised before Assessing Officer in this regard is that payments by way of advance or loan can be deemed as dividend only to extent of accumulated profits and accumulated profits of SVMIPL at beginning of year were only to tune of Rs. 7,60,894 and therefore addition in this regard should be restricted to this amount. Rejecting this argument of assessee, Assessing Officer has treated accumulated profits as on last day of accounting year for purpose of limiting amount of deemed dividend under section 2(22)(e) of Income-tax Act. 5. Aggrieved, assessee preferred appeal before CIT(A) with submissions that advances made to assessee are classified in accounts of M/s. Standard Vishwas Marble Industries Pvt. Ltd. under head 'Advance recoverable in cash or in kind for value to be received' and hence they could not be said to have been made for siphoning of profits is not germane in this regard. term 'advance' itself connotes payment towards goods to be supplied or services to be rendered. CIT(A) was not convinced with this explanation of assessee and was of view that section 2(22)(e) is deeming provision. Hence, advance made even in course of bona fide trade transactions are covered by section 2(22)(e). consideration of siphoning of profit is not relevant. Hence, advance or loan are quite wide in import. Relying upon judgment of Calcutta High Court in case of M.D. Zindal v. CIT [1987] 164 ITR 28 in which it has been held that advance for purpose of section 2(22)(e) may be even by way of transfer of goods CIT(A) held that use of words 'any payment' in beginning of section 2(22)(e) in context of 'advance or loan' signifies that each of payment made when payee is not already creditor constitute advance. It is only when payee is creditor of payer that payments can be construed as repayment of debt not falling in category of payment by way of advance or loan. Hence, payment made even in running account when payee has debit balance all along are hit by section 2(22)(e) of Income-tax Act. In support of this proposition, CIT(A) has placed reliance upon judgment of jurisdictional High Court in case of CIT v. P.K. Badiani [1970] 76 ITR 369 (Bom.) which was later on confirmed by Apex Court in case of P.K. Badiani v. CIT [1976] 105 ITR 642. 6. With regard to objection on account of accumulated profits, CIT(A) has observed that payment by way of loan and advances to assessee is started from 14-10-1996 and total amount during year was Rs. 1,51,25,647. major amounts were paid in last quarter of year. Rs. 50 lakhs was paid on 10-1-1997, another sum of Rs. 50 lakhs was paid on 18-1-1997 and Rs. 24 lakhs was paid on 31-3-1997. profits of M/s. Standard Vishwas Marble Industries Pvt. Ltd. for year ending 31-3-1997 was Rs. Vishwas Marble Industries Pvt. Ltd. for year ending 31-3-1997 was Rs. 2,14,55,625. proportionate profit up to month of September, 1996 will work out to Rs. 1,07,27,807. This profit when added with accumulated profits as on 31-3-1996 amounting to Rs. 7,60,894, comes to Rs. 1,14,88,701 which is sufficient to cover payment made before beginning of last quarter. proportionate profit for third quarter comes to Rs. 53,63,903 and when it is added to accumulated profits up to second quarter, total accumulated profits at beginning of last quarter comes to Rs. 1,68,52,604 which is sufficient to cover payments made in last quarter. CIT(A) further observed that even if successive payments are reduced from day-to-day accretion in accumulated profits worked out in this manner, subsequent payments are found to be less than accumulated profits so reduced. He, accordingly, held that total amount of payment by way of advance or loans during year is covered by amount of accumulated profits and constitutes deemed dividend under section 2(22)(e) of Explanation 2 of Income-tax Act. 6A. Now assessee has preferred appeal before Tribunal. Besides reiterating its contentions raised before lower authorities, learned counsel for assessee has submitted that assessee is not shareholder of lender company, as such, provisions of section 2(22)(e) of Act cannot be invoked. In support of his contention, he placed reliance upon Explanation 3(b) below section 2(22)(e) of Act, according to which, person shall be deemed to have substantial interest in concern, other than company, if it is at any time during previous year, beneficially entitled to not less than 20% of income of such concern. learned counsel for assessee further contended that while making advance to assessee- company, no benefit was passed over to any of shareholders and moreover it was only trade advance and not loan, as such, provisions of section 2(22)(e) of Act cannot be invoked. With regard to accumulated profits, learned counsel for assessee has invited our attention that accumulated profits of immediately preceding year should be taken into account for purpose of its distribution. It cannot be computed on daily basis. In support of this plea he has relied upon following judgments: 1. CIT v. V. Damodaran [1980] 121 ITR 572 (SC) 2. P.K. Badiani's case (supra) 3. Smt. Tarulata Shyam v. CIT [1977] 108 ITR 345 (SC) 4. CIT v. H.K. Mittal [1996] 219 ITR 420 (All.) 5. CIT v. Nagindas M. Kapadia [1989] 177 ITR 393 (Bom.) 6. R. Dalmia v. CIT [1982] 133 ITR 169 (Delhi) 7. M.B. Stock Holding (P.) Ltd. v. Asstt. CIT [2003] 84 ITD 542 (Ahd.) 7. learned DR on other hand has invited our attention to provisions of section 2(22)(e) of Income-tax Act with submissions that any payment by company, not being company in which public is substantially interested, of any sum by way of advance or loan to shareholder, or to any concern in which such shareholder is member or partner and in which he has substantial interest or any payment by any such company on behalf of or for individual benefit or of any such shareholder to extent to which company in either case possesses accumulated profits. Undisputedly, there is common shareholding between assessee as well as lender company. revenue authorities has given categorical finding that Mr. Kirti Kapadia and Ms. Tanuben Kapadia held more than 10% of equity shares of lender company i.e., SVMIPL and more than 20% of equity shares of assessee-company and these findings were not rebutted by assessee by placing any documentary evidence. In these circumstances, since there are common shareholdings, provisions of section 2(22)(e) are attracted. 8. So far as issue of accumulated profits is concerned, learned DR has invited our attention that as per provision of section 2(6A) of 1922 Act accumulated profits means 'Heaped up, stored-up, or put by'. It indicates effort on part of person in that direction. current profit is what accrues in praesenti, while accumulated profits relate to past and hence current profit cannot be included in accumulated profits as held by Apex Court in case of V. Damodaran (supra). Similar view was also taken by Apex Court and various High Courts in case of CIT v. M.V. Murugappan [1970] 77 ITR 818 and P.K. Badiani's case (supra), etc. But, later on sub-clause (e) of ITR 818 and P.K. Badiani's case (supra), etc. But, later on sub-clause (e) of section 2(6A) of 1922 Act was amended in 1956 so as to include for purpose of that sub-clause, current profit and amended sub-clause referred to accumulated profits immediately before its liquidation whether capitalized or not. In order to neutralize decision holding that 'accumulated profits' in section 2(6A) of 1922 Act do not include current profit, expression 'accumulated profit' was defined in 1961 Act, so as to include current profit up to date of distribution or payment. Explanation 2 to section 2(22) lays down that expression 'accumulated profit' in sub-clauses (a), (b), (d) and (e) shall include profits of company up to date of distribution or payment referred to in those sub-clauses and clause (c) shall include all profits of company up to date of liquidation, but, shall not include where liquidation is consequential on compulsory acquisition of its undertaking by Government or Corporation owned or controlled by Government under any law for time being in force, includes any profit of company prior to three successive previous years immediately preceding previous year in which such acquisition took place. learned DR has also placed reliance upon judgment of Apex Court in case of ITO v. Salt Bros. (P.) Ltd. [1966] 60 ITR 83. It was further contended that since there is no ambiguity in definition of accumulated profits, it has to be worked out as per Explanation 2 and it includes all profits of company up to date of distribution or payment or liquidation. Since there was sufficient accumulated profits at end of third quarter to meet this advance given to assessee, Assessing Officer has rightly treated entire advance to be deemed dividend in hands of assessee. 9. Having carefully examined orders of lower authorities in light of rival submissions, we find that there was common shareholdings between assessee and lender company viz., SVMIPL. learned counsel for assessee has simply raised dispute that provisions of section 2(22)(e) can only be invoked when advance or payments are made shareholders of company. But, this is not correct position of law. According to provisions of section 2(22)(e) of Income-tax Act, dividend includes any payment by company, not being company in which public are substantially interested, of any sum whether as representing part of asset of company or otherwise made after 31st day of May, 1987 by way of advance or loan to shareholder, being person who is beneficial owner of shares not being shares entitled to fixed rate of dividend whether with or without right to participate in profits holding not less than 10 per cent of voting power or to any concern in which such shareholder is member or partner and in which he has substantial interest (hereinafter in this clause referred to as said concern) or any payment by any such company on behalf or for individual benefit, of any such shareholder to extent to which company in either case possessed accumulated profits. language used in this sub-section is very clear and unambiguous. Legislature has identified three categories in which payments made by company shall be treated to be dividend (1) any payment by company to shareholders being person who is beneficial owner of shares, not being shares entitled to fixed rate of dividend whether with or without right to participate in profits holding not less than 10 per cent of voting power (2) Any payment by company to any concern in which aforesaid shareholder is member or partner and in which he has substantial interest (3) Any payment by any such company on behalf or for individual benefit of any such holders. But, payment made by company can only be treated to be deemed dividend to extent of accumulated profits possessed by company. Through Explanation 1 and Explanation 2, accumulated profits had been defined in unequivocal terms and according to these Explanations, accumulated profits shall not include capital gain arising before 1st day of April, 1946 or after 31st day of March, 1948 and before 1st day of April, 1956. accumulated profits in sub-clauses (a), (b), (d) and (e) of section 2(22) shall include all profits of company up to date of distribution or payment referred to in those sub-clauses and in sub-clause (c) it shall include all profits of company up to date of liquidation. Through Explanation 3, substantial interest was also defined in its clause (b) according to which, person, shall be deemed to have substantial interest in concern other than company if he is at any time during previous year beneficially entitled to not less than 20 per cent of income of such concern. If facts of case are examined in light of provisions of section 2(22)(e), we would find that undisputedly, shareholders of lender-company Mr. Kirti Kapadia and Mrs. Tanuben Kapadia were holding more than 10 per cent of equity shares in lender-company i.e., SVMIPL and these shareholders also held more than 20 per cent of equity shares in assessee-company. Being common shareholdings in both companies, assessee's case falls within category No. 2 as discussed above. lower authorities are given categorical finding in this regard and nothing is placed on behalf of assessee to rebut this finding. We, therefore, have no hesitation in holding that provisions of section 2(22)(e) were rightly invoked by revenue authorities on advance given to assessee. In this section, it has not been distinguished whether these advances are trade advances or for different purposes. Only few exceptions are given in which these advances do not fall within category of deemed dividend. In instant case, assessee has taken plea that advances and loans were given in ordinary course of its business, but, nothing is placed on record to establish that substantial part of business of lender-company i.e., SVMIPL was lending of money. Whereas, CIT(A) has given categorical finding in light of profits earned by lender-company i.e., SVMIPL and has held that gross receipt of lender-company were to tune of Rs. 7,80,69,819 out of which only Rs. 4,38,835 was accounted for interest receipt. During course of hearing, nothing had been placed before us on behalf of assessee to establish that substantial part of business of lender-company is of lending money. In these circumstances, we agree with finding of CIT(A) that assessee does not fall within any exemption clause. 10. Now next question comes, what would be accumulated profits t o limit advance given by lender-company to be treated as deemed dividend. Whether, it should be accumulated profit computed at end of t h e immediately preceding year or it would be computed on day of distribution or payment or method adopted by CIT(A) i.e., at end of previous quarter? In this respect, we would like to examine history of computation of accumulated profit, how it was computed in past. 11. Before introduction of Income-tax Act, 1961, there was Act 1922 i n which section 2(6A) dealt with issue of accumulated profits. Though expression 'accumulated profits' was not defined in 1922 Act at initial stage and its meaning evolved in judicial decisions. Accumulated profit in section stage and its meaning evolved in judicial decisions. Accumulated profit in section 2(6A) means 'Heaped up, stored up or put by' it indicates effort on part of person in that direction. In case of Damodaran (supra) it was held that words 'accumulated profit' in section 2(6A) of 1922 Act do not include 'current profit' and hence profits earned by company during year in which loans are advanced to shareholders cannot be regarded as accumulated profits for purpose of section 2(6A)(e) of 1922 Act. Supreme Court approved decisions in Girdhardas & Co. Ltd. v. CIT [1957] 31 ITR 82 (Bom.). In case of CIT v. M.V. Murugappan [1966] 62 ITR 382 (Mad.) and P.K. Badiani's case (supra) similar view was taken by respective High Courts. Sub-clause (e) of section 2(6A) of 1922 Act was amended in 1956 so as to include for purpose of that sub-clause, current profits and amended sub-clause referred to accumulated profits immediately before its liquidation whether capitalized or not. Thereafter, new Income-tax Act, 1961 was introduced substituting old Act and relevant provisions relating to accumulated profits in section 2(22)(e) of Income-tax Act, 1961. In order to neutralize decisions holding that 'accumulated profits' in section 2(6A) of 1922 Act do not include current profits, expression 'accumulated profits' was defined in 1961 Act so as to include current profits 'up to date of distribution or payment'. Explanation 2 to section 2(22) lays down that expression 'accumulated profits' in sub-clauses (a), (b), (d) and (e) shall include profits of company up to date of distribution or payment referred to in those sub-clauses and sub-clause (c) shall include all profits of company up to date of liquidation, but, shall not where liquidation is consequent on compulsory acquisition of its undertaking by Government or Corporation owned or controlled by Government under any law for time being in force, includes any profits of company prior to three successive previous years immediately preceding previous year in which such acquisition took place. Through Explanations 1 and 2 below section 2(22)(e) of Income-tax Act, 1961, expression 'accumulated profits' was defined and it has been made explicitly clear that accumulated profit in sub- clauses (a), (b), (d) and (e) shall include all profits of company up to date of distribution or payment referred to in those sub-clauses and in sub-clause (c) shall include all profits of company up to date of liquidation. Whatever income Legislature wants to exclude, they made it clear through Explanation 1 and Explanation 2 also. In Explanation 1, it has been stated that expression 'accumulated profit' wherever it occurs in this clause shall not include capital gains arising before 1st day of April, 1946 or after 31st day of March, 1948 and before 1st day of April, 1956 and through Explanation 2 it has also been stated in unequivocal terms that accumulated profit for purpose of sub- clause (c) of section 2(22), accumulated profit shall include all profits of company up to date of liquidation, but, shall not include where liquidation is consequent on compulsory acquisition and its undertaking by Government or Corporation owned or controlled by Government under any law for time being in force, includes any profits of company prior to three successive previous years immediately preceding previous year in which such acquisition took place. For sake of reference, we reproduce Explanation 1 and Explanation 2 in order to understand real meaning of accumulated profit as used for purpose of section 2(22)(e) of Income-tax Act. Explanation 1.-The expression 'accumulated profits', wherever it occurs in this clause, shall not include capital gains arising before 1st day of April, 1946, or after 31st day of March, 1948, and before 1st day of April, 1956. Explanation 2.-The expression 'accumulated profits', in sub-clauses (a), (b), (d) and (e), shall include all profits of company up to date of distribution or payment referred to in those sub-clauses, and in sub-clause (c) shall include all profits of company up to date of liquidation (but shall not, where liquidation is consequent on compulsory acquisition of its undertaking by Government or corporation owned or controlled by Government under any law for time being in force, include any profits of company prior to three successive previous years immediately preceding previous year in which such acquisition took place). 12. From careful reading of these Explanations, we are of view that there is no ambiguity in definition of accumulated profits given in these Explanations and for purpose of sub-clause (e), accumulated profits include all profits of company up to date of distribution or payment referred to in sub-clause (e). Only capital gains arising before 1st day of April, 1946 or after 31st day of March, 1948 and before 1st day of April, 1956 are to be excluded from accumulated profits determined after date of distribution or payment. Whatever judgments were referred before us, they all relates to pre-amendment periods i.e., Income-tax Act, 1922 in which section 2(6A) deals with accumulated profit and accumulated profit was defined through series of judgments of Apex Court and various High Courts. But, to nullify impact of these judgments, amended provisions were brought in new Act 1961 in which expression 'accumulated profit' has been defined in unequivocal terms. We have also examined commentaries of Chaturvedi Pithisaria 5th Edition of Pages 178 and 179 in which it has been explained that provisions of section 2(6A) of 1922 Act did not contain definition of term 'accumulated profits' similar to one found in Explanation 2 to section 2(22) of 1961 Act. In 1961 Act, definition of section 2(22) is materially different on this score due to presence therein of Explanation 2 which enacts that expression 'accumulated profit' in sub-clauses (a), (b), (d) and (e) shall include all profits of company up to date of distribution or payment and in sub- clause (c) shall include all profits of company till date of liquidation subject to exception provided therein. In constructing statutory provisions first and foremost rule of construction is literally construction. All that we have to see at very out set is what that provision say. If provision is unambiguous and if from that provision legislative intent is clear, we need not call into aid of other rules for construction of statute as held by Apex Court in case of Hiralal Ratanlal v. Sales Tax Officer AIR 1973 SC 1034. other rules of construction of statute are called into aid only when legislative intention is not clear. When language of statute is plain and unambiguous, that is t o say, admits of but one meaning, there is no occasion for construction. task of interpretation can hardly be said to arise in such case as stated in Maxwell, interpretation of statute, 11th addition. Their Lordships of Calcutta High Court have held that in case of Amin Shariff v. Emperor ILR 61 Calcutta 607 that if words of statute are in themselves precise and unambiguous, then no more can be necessary then to expound those words in their natural and ordinary sense. words themselves alone do, in such case, best declare intention of law giver. 13. In case of Tarulata Shyam (supra) Their Lordships have held that there is no scope for importing into statute, words which are not there. Such importation would be, not to construe, but to amend statute. Even if there be casus omisus defect can be remedied only by legislation and not by judicial interpretation. intention of Legislature is primarily be gathered from words used in statute. Once it is shown that case of assessee comes within letters of law, he must be taxed, however great hardship may appear to judicial mind to be. In light of all these judicial pronouncements, if we examine facts of instant case, we would find that through Explanation 2, Legislature has defined word 'accumulated profit' in unequivocal terms and there is no ambiguity therein. Whatever judgments are relied on, they pertain to old provisions in which accumulated profits were not defined and definition of accumulated profits were developed through various judicial pronouncements. We have also carefully examined order of Tribunal in case of M.B. Stock Holding (P.) Ltd. (supra) which were rendered on 27th December, 2001 in which Tribunal has examined Explanation to section 2(22)(e) of Act in light of judgment of Apex Court in case V. Damodaran (supra), but, did not look to object of introduction of Explanation 2 to section 2(22)(e) of Income-tax Act and Tribunal has drawn inference that Legislature has no intention to override decision of Supreme Court in case of V. Damodaran (supra), whereas, facts are otherwise. In original provisions of section 2(6A)(c) of Income-tax Act, 1922, accumulated profit was not defined. Its definition was developed on account of judgments of Apex Court in case of Damodaran and other judgments of various High Courts through which it has been clarified accumulated profits relate to past profits and current profit cannot be included therein. If Legislature had same intention and they did not want to have different meaning of accumulated profits, there would be no need to introduce Explanation 2 to section 2(22)(e) through which they have made it abundantly clear that expression 'accumulated profit' means shall include all profits of company up to date of distribution or payment referred to in sub-clauses (a), (b), (d) and (e) and in sub-clause (c) shall include profit of company up to date of liquidation. 14. In fact, in order to neutralize aforesaid decision of Apex Court holding that accumulated profits in section 2(6A) of 1922 Act do not include 'current profits', expression 'accumulated profits' was defined in 1961 Act through Explanation 2 to section 2(22)(e) so as to include profit up to date of distribution or payment. We, therefore, of view that much assistance cannot be drawn from this Order of Tribunal in favour of assessee. Once Legislature has defined words 'accumulated profit', no other meaning of accumulated profits can be inferred or interpreted. In instant case, though Revenue is required to compute accumulated profits up to date of distribution or payment, but, they have computed up to end of last quarter of this previous year which is less than accumulated profits computed on date of distribution or payment. But, these facts are not clear from record. We, therefore, restore matter to file of Assessing Officer with direction to re-compute accumulated profits up to date of distribution or payment and if it is found to be lesser than accumulated profits adopted by Assessing Officer, then, it should be taken into account for purpose of deemed dividend income as per section 2(22)(e) of Act. Otherwise, Order of Assessing Officer would be upheld. 15. Ground No. 2 relates to unexplained cash credits of Rs. 1,76,40,000 and in this regard, it is noticed from orders of lower authorities that Assessing Officer has introduced cash credit in shape of loan from 470 parties for which maximum amount outstanding at any time during years works out to be Rs. 21,94,89,158. assessee was asked to file confirmations for loans taken by assessee with GIR Nos. In response to that, assessee has furnished confirmations out of which it was found that 151 parties are not assessed to tax. assessee was accordingly asked to furnish bank statements, source of loan/acceptance wherever GIR Nos. is not furnished. During course of assessment proceedings it was stated on behalf of assessee that it is very difficult for assessee to furnish these details and request department to issue commissions/summons as applicable. Further, vide letter dated 3-1-2000 it was stated on behalf of assessee that assessee was in possession of part confirmations from Bhavnagar parties. Some confirmations were furnished before Assessing Officer. It was also furnished to Assessing Officer vide letter dated 1-2-2000 that assessee-company has completely stopped business activity of Bhavnagar and local parties are not responding nor extending any co- operation. Assessing Officer was therefore requested to summon parties. In view of request made by assessee, commission under section 131(1)(d) was issued to ADI (Inv.) to verify identity, genuineness and creditworthiness of 151 parties. Subsequently, Dy. Director of Investigation, Bhavnagar, has issued summons under section 131 to all 151 parties and they have been asked to furnish their bank accounts, bills, vouchers and return of incomes. Thereafter, Assessing Officer received report of ADI (Inv.), Bhavnagar on 15-2-2000 in which he has stated that 50 parties of Bhavnagar could not be traced and letter sent by Registered Post with Acknowledgement. Due have been received back with remark 'not found' or 'Incomplete address'. This report was confronted to assessee and assessee was asked to furnish reply on 24-2-2000. In response thereto, assessee wrote letter to brokers through whom amounts were arranged. Thereafter, vide letter dated 24th March, 2000, assessee made request to Assessing Officer that summons were not served to certain parties because they have shifted their addresses and he furnished their correct addresses. This explanation of assessee was not accepted by Assessing Officer and he treated amount of Rs. 1,32,05,000 credited in name of aforesaid 50 parties. 17 parties from Bhavnagar were failed to appear in response to summons and Assessing Officer has also added sum of Rs. 25,94,000 received from these parties to income of assessee as unexplained cash credit. Likewise, amount of Rs. 3,50,000 introduced in name of three parties were added under section 68 of Income-tax Act as assessee could not prove genuineness of transactions and their creditworthiness. Accordingly, addition of Rs. 1,86,40,000 was made under section 68 of Income-tax Act before Assessing Officer. This addition was reduced by Rs. 10 lakhs by rectification under section 154 of Income-tax Act. 16. Against addition of Rs. 1,76,40,000 assessee preferred appeal before CIT(A) with submissions that all payments were received through account payee cheques and out of aforesaid parties, 26 parties were assessed to tax and as such credit relating to 26 parties amounting to Rs. 89,54,000 should not be treated to be unexplained cash credit. Assessing Officer has only proceeded to make enquiries with regard to 151 parties, out of 470 creditors. It was further contended before Assessing Officer that enquiry was conducted at fag end of year and assessee was not given sufficient time to file confirmations of creditors. contention of assessee were not appreciated by CIT(A) and he confirmed additions. 17. Now, assessee is before us and invited our attention to assessment order and enquiries conducted by DDI, Bhavnagar, with submissions that when report was confronted to assessee, assessee sought time from Assessing Officer to furnish confirmations etc. of creditors. Since assessment was going to be time-barred, Assessing Officer concluded enquiry and made additions. From careful perusal of orders of lower authorities, we find that assessee was not given sufficient time to prove these cash credits as enquiry with regard to cash creditors was initiated in January or February when assessment is going to be time-barred on 31st March. Since most of creditors belong to Bhavnagar, assessee should have been given sufficient time to produce confirmations or any other evidence in order to prove genuineness of credits and creditworthiness of creditors. Since issue was not properly investigated by Assessing Officer in light of explanations of assessee, we are of view that this issue requires fresh adjudication. We, therefore, set aside order of Commissioner (Appeals) in this regard and restore matter to file of Assessing Officer to re-adjudicate issue afresh after affording proper opportunity of being heard to assessee. 18. Ground No. 3(c) relates to disallowance of interest of this unexplained cash credit. Since issue of unexplained cash credit has been restored to Assessing Officer for re-adjudication, this ground becomes infructuous. Assessing Officer, is however, at liberty to adjudicate issue of interest along with this issue of unexplained cash credit. 19. Appeal No. 1089/Mum./2002: This appeal by assessee is preferred against order of CIT(A) passed under section 154 of Income-tax Act on solitary ground that CIT(A) has erred in fact and in law in confirming order under section 154 dated 5th June, 2000 of Assessing Officer rejecting claim of assessee that addition on account of three parties had to be restricted to Rs. 2,55,000 against amount of Rs. 13,60,000 wrongly added by him despite fact that said addition was erroneous and based on incorrect information furnished in tax audit report under section 44AB in Form No. 3(cd) along with return of income which was later on corrected by Auditor vide his letter dated 19th June, 2000 wherein it had been clarified that said mistake in tax audit report was on account of typographical error. During course of hearing, both parties have agreed to proposition that if issue of cash credit is restored back to file of Assessing Officer for re- adjudication, impugned issue may also be re-examined by Assessing Officer along with other issue of unexplained cash credit. Since, we have already set aside issue of unexplained cash credit and restored it to file of Assessing Officer for re-adjudication, this issue is also restored back to file of Assessing Officer for re-adjudication, after affording proper opportunity of being heard to assessee. Accordingly, order of CIT(A) is set aside and matter is restored to file of Assessing Officer to re-adjudicate it in terms indicated above. 20. In result, Appeal No. 1088/Mum./2002 is partly allowed for statistical purposes. 21. In result, Appeal No. 1089/Mum./2002 is allowed for statistical purposes. *** NCK SONS EXPORTS (P) LTD. v. INCOME TAX OFFICER