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2021 (6) TMI 417 - AT - Income TaxValidity of assessment passed u/s.143(3) r.w.s. 153C - proof of incriminating material found as a result of search or not - addition u/s 68 - HELD THAT:- In this case, the AO has made additions on the basis of statement recorded from one Shri V.K. Keshari without providing said statement to the assessee and also without providing an opportunity of cross examination, even though the assessee has sought for such cross examination, in contravention of principles of natural justice. Therefore, on this count additions made by the AO cannot be sustained. Addition u/s 68 - As per the findings of the ld.CIT(A), the assessee has filed name, address and PAN card of the company and its Directors. The assessee has also filed financial statements of loan creditors and their bank statements. As per financial statements, creditors are having sufficient source of income to establish creditworthiness of loan transactions with the assessee. Further, all loan transactions are routed through proper banking channels - the assessee has repaid said loans along with interest much before the date of initiation of search proceedings in the case of the assessee. As also an admitted fact that the assessee has obtained loans through Shri K.K. Parsuramka, a Chartered Accountant by profession and said loans are backed by equitable mortgage of immovable properties in favour of Shri K.K. Parsuramka, the person who arranged loans. From the above findings of the ld.CIT(A), it is very clear that the assessee had discharged its burden cast upon u/s.68 of the Act. In this case, the AO has made additions only on the basis of statement recorded from third party ignoring various evidences filed by the assessee to prove unsecured loans taken from said parties. Therefore, AO was erred in making addition towards unsecured loans and consequent interest paid on said loans u/s.68 - Appeal of revenue dismissed.
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