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2023 (9) TMI 259 - HC - Income TaxAddition u/s 68 - AO observed that, assessee had taken bogus loans from individuals who were engaged in cheque discounting activities facilitating many entries of loans/purchases/advances to various persons - ITAT deleted the addition - HELD THAT:- Having perused the reasons of the ITAT, it is apparent that both the authorities i.e. CIT (Appeals) and the Tribunal have on the basis of evidence found that the identity, genuineness and creditworthiness of the loan of the assessee were confirmed by way of the evidence produced. These documents were filed by the Director Shri Tamal Roy. Even, during the course of survey of GCSL, there was no other evidence found which would support the statement of the Director. ITAT correctly held we do not agree with the sweeping allegation of the Hon’ble Assessing Officer that “Transactions were accommodation entries” We note that there is no written evidence, against the assessee except statement of Shri Tammal Roy. The statement of third party cannot be used against the assessee without giving opportunities of cross examination - inspite of specific request made by the assessee, opportunity of cross examination was not provided to the assessee, hence addition made by the assessing officer relying upon such statement is clearly in violation of the principle of natural justice As confirmation from the creditor was filed before the assessing officer, along with copy of ITR, copy of bank account and audit report of the auditor. Survey ws 133A of the Act was conducted by the Department on the creditor, which prove identity beyond doubt as statement of the director was recorded twice. As loan was received through regular banking channels, interest was regularly paid and TDS was deducted and deposited in government account as per the provision of the I.T. Act. We note that that if the transaction is through regular banking channels and creditor has confirmed the transactions, such transactions are genuine and therefore, addition made by the assessing officer are not sustainable. Decided in favour of assessee.
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