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2021 (2) TMI 26 - AT - Income Tax
Non issuance of notice u/s 143(2) - Unsecured loans u/s 68 - HELD THAT:- The assessment order passed by the DCIT, Circle-11(1), Kolkata, without issuance of notice u/s. 143(2) of the Act, is bad in law. If it is held that the ITO Ward-3(3), Kolkata, has jurisdiction over the assessee, then the assessment order passed by the DCIT, Circle-11(1), Kolkata, would become bad in law as it would be an order passed by an officer who has no jurisdiction. Looking at it either way, we find that the assessment is bad in law.
Addition u/s 68 - On examining the above voluminous records and documents produced by each creditor in support of the genuineness of the transaction and as interest has been paid on all these loans and as TDS has been deducted on these interest payments and as the Assessing Officer nor the Ld. CIT(A) have any adverse material to controvert the evidence filed by each of these creditors and also looking at the fact that each of the parties are assessed to Income Tax and as many of the loans have been repaid, we come to a conclusion that the addition made u/s. 68 of the Act, on the ground that these are unexplained cash credits, is bad in law. The loan creditors in this case have also explained sources of sources. Assessing Officer as well as the Ld. CIT(A) based their decisions on conjectures and surmises. Thus, this addition made u/s. 68 of the Act, is hereby deleted. Consequently, the interest expenditure disallowed on these cash credits is also directed to be deleted - Decided in favour of assessee.