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2014 (7) TMI 517 - ITAT AHMEDABADAddition u/s 68 of the Act - Unexplained unsecured loans – Held that:- No specific error in the finding of the CIT(A) could be pointed out by the revenue - all the four creditors were examined by the AO wherein they admitted the fact of advancing of loan in question to the assessee - no material could be brought on record by the Revenue to show that the cash which was deposited in the bank account of the creditors had flown from the assessee or creditors had actually no source of their own - all the four creditors were income tax assessee, advanced the loan to the assessee through banking channel and they all had their independent source of income and the only observation of the AO is that in his subjective opinion, they are persons of small means. Where the loan creditors have shown the amount advanced to the assessee in the income tax return filed with the Income Tax Department and the Department has accepted the same, then the credits are prima facie genuine – Relying upon Jalan Timbers Vs. Commissioner of Income Tax [1996 (8) TMI 83 - GAUHATI High Court] - the phraseology of section 68 of the Income Tax Act, 1961 was clear, that the legislature has laid down that in the absence of a satisfactory explanation, the unexplained cash credit may be charged to income tax as the income of the assessee of that previous year, that the legislative mandate is not in terms of the words "shall be charged to income tax as the income of the assessee of that previous year", that the unsatisfactoriness of the explanation does not and need not automatically result in deeming the amount credited in the books as income of the assessee. The loan creditors who have advanced sum to the assessee were income tax assessees and have disclosed the sum advanced to the assessee in their return of income filed with the Income Tax Department and also admitted to above facts in their statement recorded u/s. 131 of the Act - the loans were received by the assessee through cheques drawn on the bank accounts of the creditors - the assessee has discharged its burden of proving the identity of the creditors, genuineness of the transactions and creditworthiness of the loan creditors – CIT(A) was fully justified in deleting the addition and there was no reason to interfere with the order of the CIT(A) – Decided against Revenue.
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