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2020 (2) TMI 1181 - AT - Income TaxUnexplained loan u/s 68 - disproportionate income of the creditors - loan amount have been taken from the family for purchase of property for family - HELD THAT:- A.O, did not doubt the identity of the creditors and their creditworthiness. The A.O. merely doubted genuineness of the transaction because of the disproportionate income of the creditors as regards the loan advanced to the assessee. In case A.O. was having any doubt on any of the point, he could have summoned all the creditors and record their statements on oath under section 131 of the I.T. Act, 1961, to find-out the truth. Since all the creditors are having sufficient funds in their Bank accounts and they have confirmed giving loan to the assessee, initial burden upon assessee is discharged to prove all the three ingredients of Section 68 of the I.T. Act, 1961, i.e., identity of the creditors, their creditworthiness and genuineness of the transaction particularly when all the creditors are assessed to tax and transactions are routed through banking channel only. A.O, however, did not make any enquiry into the matter on the documentary evidences furnished by the assessee and merely rejected the claim of assessee on irrelevant reasons that the creditors have disproportionate income to that of the loan advanced to the assessee. A.O. failed to examine the creditworthiness of the creditors from the source explained in their Bank accounts. Since no further investigation have been carried out by the A.O. on the documentary evidences filed by assessee, therefore, A.O. cannot fasten the assessee with such liability under section 68 of the I.T. Act, 1961. The A.O. failed to carry his suspicion to logical conclusion by further investigation. In the present case has even proved source of the source of the creditors. Therefore, there is no question of considering it to be unexplained credits in the hands of the assessee. The A.O. suspected the loan amount because the assessee filed return of income at ₹ 30 lakhs only and made investment of ₹ 11.65 crores. Since the assessee explained that sufficient loan amount have been taken from the family for purchase of property for family, then in that event, A.O. shall have to consider the explanation of assessee in the light of fact that assessee made investment in purchase of property from the family source. In the absence of any investigation from the side of the A.O. on the documentary evidences filed on record, there were no justification to make the addition. We, accordingly, set aside the Orders of the authorities below and delete the entire addition. - Decided in favour of assessee.
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