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| The Tax Publishers2019 TaxPub(DT) 0944 (Mum-Trib) INCOME TAX ACT, 1961
Section 68
As no shortcoming was pointed out in various documents brought on record by the assessee to establish identity and creditworthiness of the loan creditor and genuineness of loan transactions., therefore, statement of alleged entry operator as recorded by investigation wing could not be used against the assessee and that too, in the absence of opportunity of cross examination afforded to assessee. Therefore, AO was not justified in subjecting loan amount to addition under section 68.
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Income from undisclosed sources - Addition under section 68 - Receipt of unsecured loan - Identity, creditworthiness and genuineness
AO received information from investigation wing as to assessee being beneficiary of alelged entry operators providing accommodation entries in the form of unsecured loans. Accordingly, AO treated unsecured loans received by the assessee as unexplained cash credit and also made addition under section 68.Held: Assessee had furnished evidences such as PAN, income-tax returns, audited balance sheets and bank statements and loan confirmation of lending company. No shortcoming was pointed out in various documents brought on record by the assessee to establish identity and creditworthiness of the loan creditor and genuineness of loan transaction. Since, the AO has not provided an opportunity of cross-examination of alleged entry operators, statements recorded by investigation wing could not be used against the assessee. Therefore, addition was deleted.
Followed:Kishinchand Chellaram v. CIT (1980) 125 ITR 713 (SC) : 1980 TaxPub(DT) 1130 (SC).
REFERRED : R.B. Shreeram Durga Prasad (1989) 176 ITR 169 (SC) : 1989 TaxPub(DT) 0874 (SC), Jindal Vegetable (order of Hon'ble Delhi High Court in ITA No. 428 of 2007, (2009) 174 Taxman 440 (Raj.) : 2009 TaxPub(DT) 1017 (Del-HC), Laxman Bhai Patel [order of Gujarat High Court dated 22-7-2005 in ITR No. 41/1997].
FAVOUR : In assessee's favour.
A.Y. :
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