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2006 (1) TMI 182 - AT - Income TaxAddition u/s 68 - Summons issued u/s 131 to the creditors - Burden Of Proof - unproved loan - interest - whether the onus cast on the assessee u/s 68 is deemed to have been discharged, the moment he makes a request to the AO for issuance of summons to the creditor or even where summons were issued and served on the creditor - HELD THAT:- In our opinion, it is not so. A loan of ₹ 5,00,000 was introduced through cheque in the name M/s Equinox Assets & Capital Management (P) Ltd. The assessee was required to prove the loan. However, he requested the AO to summon the creditor to verify his creditworthiness and genuineness of the transaction. Summons under s. 131 was issued but the creditor did not appear, then the AO asked the assessee to produce the creditor. Since the assessee failed to produce the creditor, the AO treated the said loan of ₹ 5,00,000 as unexplained and added the same to the total income of the assessee along with interest of ₹ 75,000. Thus, any sum found credited in the books of account of the assessee maintained for the previous year may be charged to income-tax as the income of that previous year if (i) the assessee offers no explanation about the nature and source of such sum, or (ii) explanation offered by him in the opinion of the AO is not satisfactory. From a careful perusal of the record, we are of the opinion that the assessee has not properly discharged the onus of proving the cash credit by placing some documentary evidence as to what efforts he has made in order to produce the creditor before the AO and also to what has happened to the credit, whether it was returned or not. We, therefore, set aside the order of the CIT(A) and restore the matter to the file of the AO with a direction to re-adjudicate the issue afresh after affording a proper opportunity of being heard to the assessee and if the assessee succeeds in discharging its onus by placing some evidence that he has made all possible efforts to produce the creditor, but, failed to do so, AO shall issue summons u/s 131 to the creditor, if it is not responded, he may exercise his powers enshrined under order 16 of CPC in the same manner as the Civil Court does. Thus, in our view, the case requires to be set aside to the file of AO and the appeal of the Revenue may be allowed for statistical purpose. We, therefore, set aside the order of CIT(A) and restore it to the AO to adjudicate the issue afresh, after affording a proper opportunity of being heard to the assessee. In the result, appeal of the Revenue is allowed for statistical purposes.
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