INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Receipt of unsecured loan - CIT(A) not having considered additional evidence filed by assessee, i.e., bank statements of creditors but held the loans as ingenuine on the basis of information derived from very same bank statements

AO made addition under section 68 on account of unsecured loans taken by assessee, amounting to Rs. 50 lakhs, remaining unexplained. Before CIT(A), assessee filed bank account statements of the loan depositors, from which cheques had been issued to assessee, as additional evidences along with an application seeking admission of the same bringing out bona fide reason for not submitting the same earlier as there was dealy in receiving copies of same. CIT(A) held the credits ingenuine on the basis of information derived from bank statements of creditors, information derived from internet about creditors, and on the basis of finding recorded by ITAT in case of one of the creditors.Held: Bank statements of creditors admittedly were additional evidences filed by assessee showing cheque issued for making loans to assessee. But, CIT(A) had not admitted the evidences for adjudication. However, from the very same bank statements, CIT(A) derived information that there were amounts deposited before issuance of cheques to assessee in all cases. Further, CIT(A) extracted information from internet that name of one of creditors had been struck off from register of companies. Undeniably, information was not confronted to assessee and thus, impugned order of CIT(A) had been passed in gross violation of principles of natural justice. Accordingly, matter was remanded back to CIT(A) for adjudication afresh after admission of additional evidences filed by assessee.

Supported by:J.T.(India) Exports v. UOI (2003) 262 ITR 269(Del).

REFERRED :

FAVOUR : In assessee's favour (by way of remand).

A.Y. : 2013-14

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