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2022 (12) TMI 1268 - AT - Income TaxUnsecured loans - assessee is not able to prove loans taken from certain persons and thus, out of unsecured loans - HELD THAT:- Assessee has satisfactorily explained the identity, genuineness of transaction and creditworthiness of loan creditors. AO without appreciating the fact simply made additions to part of loan taken from creditors, even though, he has accepted the fact that the assessee has filed all evidences to prove identity of the creditors. It is a well settled principle of law by the decision of various courts, including the decision in the case of CIT v. Lovely Exports Pvt. Ltd. [2008 (1) TMI 575 - SC ORDER] that once name and address of creditors are furnished to the AO, then, it for the AO to proceed in accordance with law to re-open the assessment of creditors, but sum received from creditors cannot be regarded as unexplained credit/ income of the assessee. In this case, the assessee has furnished all evidences to prove the identity of creditors and also satisfactorily explained the genuineness of transactions and creditworthiness of creditors. Therefore, we are of the considered view that the AO is erred in making additions towards unsecured loans from ‘7’ parties and thus, we direct the AO to delete the additions made towards loans.Appeal filed by the assessee is allowed.
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