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2008 (1) TMI 442 - ITAT DELHI-FAddition made u/s 68 - taken loans from nine relative persons - failed to establish the creditworthiness of the creditors and the genuineness of the transactions - required to paid Interest on loan taken from relative? - HELD THAT:- The compensation stated to have been received by Hari Chand for land acquisition did not constitute the source for the loans allegedly given to the assessee. The other submission of the ld representative of the assessee that the loans were all repaid in August, 2004 does not advance the assessee's case. The repayment of the loans is an independent transaction and it does not affect in any way the question whether the original receipts of the monies were genuine or not. In CIT vs. Durga Prasad More [1971 (8) TMI 17 - SUPREME COURT], the Supreme Court observed that the Tribunal would be justified in disbelieving a story which is prima facie fantastic and does not accord with human probabilities and that the Courts and Tribunals have to Judge the evidence before them by applying the test of human probabilities. In Sumati Dayal vs. CIT [1995 (3) TMI 3 - SUPREME COURT] held that in such cases, a superficial approach to the problem should be eschewed and the matter has to be considered in the light of human probabilities and further that any transaction about which direct evidence is rarely available should be inferred on the basis of the circumstances available on the record. In that case, the majority opinion of the settlement Commission was approved as it was taken after considering the surrounding circumstances and applying the test of human probabilities. These principles apply to the present case where the documentary evidence prima facie supports the assessee's case but a closer look at the same in the light of the surrounding circumstances and applying the test of human probabilities reveal that the documentary evidence cannot be accepted. The learned CIT(A), with respect, did not approach the case from this angle and seems to have been guided merely by the documentary evidence. In this, he fell into an error. He ought to have given a wholesome treatment to the case taking into account the principles laid down by the Supreme Court in the judgments cited above. We are unable to agree with him that the AO was wrong in adding the loans aggregating to Rs. 10 lacs as the assessee's income. Hence, it is not possible to accept the submission of the learned representative of the assessee that s. 68 has no application to the case. Even without reference to the section, the amount can be added if the explanation of the assessee with regard to the nature and source of the receipt is not satisfactory. We, therefore, uphold the addition. The order of the CIT(A) is reversed and the addition is restored. The appeal of the Department is allowed with no order as to costs.
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