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2022 (5) TMI 45 - AT - Income TaxUnexplained Cash Credit u/s 68 - assessee failed to substantially explain the creditworthiness and genuineness of the transactions - HELD THAT:- It is evident that according though the copy of account of the concerned creditor and the confirmation was filed by the assessee, but the AO failed to make any enquiry. CIT(A) accepted the impugned sum of credit as explained considering evidences filed by the assessee in the form of confirmation by the concerned party by merely noticing that the AO did not specify what more was required for him to be satisfied. CIT(A) has erred in accepting the claim inasmuch as there is no positive finding as to how the ingredients of section 68 of the Act are satisfied. Section 68 of the Act is a rule of evidence and the onus is on the assessee to establish the source and nature of the credits in question. In the impugned order, CIT(A) has accepted the claim without any verification exercise or opining about the quality of the evidences. In our considered opinion, it would meet the ends of justice, if the matter is sent back to the file of the AO for carrying out the necessary verification exercise and to thereafter decide the same afresh as per law. Needless to say the AO shall allow the assessee adequate opportunity of being heard and then decide as per law. Thus, Ground No.1 raised by the Revenue is allowed for statistical purposes. Disallowance u/s 14A r.w..r 8D - HELD THAT:- We do not see any infirmity in the above finding of Ld.CIT(A) as the Revenue has not disputed the fact that the assessee has not earned any exempt income during the year under consideration. Therefore, Ld.CIT(A) has rightly followed the decision of the Hon’ble Delhi High Court in the case of Cheminvest [2015 (9) TMI 238 - DELHI HIGH COURT]. This ground raised by the Revenue is thus, dismissed. Adhoc disallowance @ 15 % as against 30% made by the AO - HELD THAT:- There is no dispute with regard to the fact that the disallowances have been made on adhoc basis. AO has not pointed out any specific instance of non-providing of bills and vouchers in support of his claim. Therefore, we do not see any reason to interfere in the finding of Ld.CIT(A).
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