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2024 (5) TMI 856 - ITAT AHMEDABADRectification u/s 154 - Substitution of addition u/s 269SS with 69A - unsecured loans - assessee engaged in banking business - Enhancement of tax liability u/s 115BBE - Initiation of penalty proceedings u/s. 270A of the Act in respect of the addition made u/s. 69A - HELD THAT:- While rectifying the order, the AO should have confronted the assessee in consonance with the application of 69A in respect of unsecured loans which the AO has failed to do so. The rectification order is simply making it a typographical mistake but the assessee has made clear in application u/s.154 of the Act that it is a typographical mistake but the very applicability of section 269SS in assessee’s case will not/should not have been applied. Thus, the rectification while giving the scope of 69A has not taken into any evidences as regards credibility of the loan, the source of the fund of the loan, identity of the parties for which the details are required and merely on the basis of PAN, voter card, form no. 16 and Addhaar card of the details of depositors will not suffice the said addition. These inquiries and verifications have not been done by the AO while making the said single line observation in the rectification order. These aspects were totally ignored by the CIT(A). Thus, it will be appropriate that whether the applicability of section 69A is justifiable or not in assessee’s case and whether the assessee proves the nomenclature of unsecured loan and its proper demarcation in his profit and loss account, we are directing the AO to verify the same after calling upon the evidences to that effect. Needless to say, the assessee be given opportunity of hearing by following the principles of natural justice. Thus, is partly allowed for statistical purposes.
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