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2016 (1) TMI 658 - AT - Income TaxAddition u/s 69 - addition made in the in sum of ₹ 8 lakhs on protective basis on account of loan advanced - Held that:- We find that the factual transactions have not been properly understood by the ld.AO and the ld.CIT(A). We hold that the assessee only received a sum of ₹ 8 lakhs as loan from his brother and had repaid the same to his brother with interest. Hence, in these facts and circumstances the relevant section, if at all, that could be applied would be section 68 and not section 69. Even though the loan transaction of ₹ 8 lakhs has been kept outside the books of account by the assessee, it cannot be taxed as unexplained cash credit u/s. 68 in the facts of the case as essential three ingredients has been duly proved by the ld.AO himself and contents of the seized documents. We hold that though the loan transaction of ₹ 8 lakhs has been kept outside the books by the assessee. It has been proved beyond doubt based on the findings given hereinabove, that the essential three ingredients of section 68 has been duly proved. Hence, the character of a receipt would not change as admittedly the loan transaction is only capital receipt in the hands of the assessee. Protective assessment - the circumstances under which a protective assessment could be made has not been properly considered by the revenue. There is absolutely no doubt with regard to the fact that the sum of ₹ 8 lakhs has already been added in the hands of the assessee’s brother for the assessment year 1991-92 u/s. 143(3) vide assessment order dated 25-02-1994 by the very same ld.AO.We hold that if an addition has been sustained for the assessment year 1991-92 in the hands of the assessee, it will amount to double addition as substantively it has already been taxed in the hands of the assessee’s brother by the very same ld.AO by giving cogent reasons and based on the seized documents found and seized by the search party in the premises of the assessee’s brother. Hence, there is no justification to make any addition in the hands of the assessee for the very sum of ₹ 8 lakhs as cash credit either on substantive or protective basis in the facts and circumstances of the case - Decided in favour of assessee.
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