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2014 (7) TMI 128 - AT - Income TaxConfirmation of additions on account of share application money - Unsecured loan – Held that:- The unsecured loan provided by the Director Mr. Rajiv Chilakalapudi was to the tune of ₹ 3 lakhs out of which, outstanding amount was ₹ 2,61,550/-, which was added by the A.O. as unexplained income of the assessee - as far as the unsecured loan was concerned, the source of ₹ 3 lakhs advanced by Mr. Rajiv Chilakalapudi stands explained by way of personal loan obtained from Citi Bank - addition of ₹ 2,61,550/- cannot be sustained on the facts – the explanation given for various withdrawals by Mr. Rajiv Chilakalapudi’s bank account was confused with the loan account of the company both by AO and CIT(A) - to the extent of addition of unsecured loan, it cannot be sustained on facts. Both Mr. B.P. Jain and Mr. Rajiv Chilakalapudi has explained the sources and are very much assessees on record - In case, the credit worthiness is doubted and source of funds are doubted, the proper course would have been to initiate proceedings in their individual hands as the persons are identified and they have confirmed the amounts which are invested in the company - on the basis of the confirmation and necessary evidence placed on record and also after perusing the remand report by the AO - there have proper sources for the amounts invested in the company –the AO is directed to set aside the additions – Decided in favour of Assessee.
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