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2020 (4) TMI 710 - AT - Income TaxAddition on account of undisclosed income - Addition u/s 68 - addition made holding that the assessee firm cannot return the loan to a dead person and a dead person cannot give loan to the partners - HELD THAT:- Since Smt. Kanta Hurkat was died earlier and the repayment was made to her legal heir Shri Manak Chand Hurkat through bank account operated jointly by late Kanta Hurkat and Shri Manak Chand Hurkat and as such it was operated by Shri Manak Chand Hurkat after death of Smt. Kanta Hurkat. CIT(A) should have accepted this clarification but he did not appreciate the same and just confirmed the order of the A.O. Found that as the case was time barring and the assessee could not obtain confirmation of such transactions from the legal heir of Late Kanta Hurkat, the case was finalised by the A.O. on 22/03/2016 U/s 143(3). As the confirmation has been obtained later on and essential evidence to decide the case, the same was filed before the ld. CIT(A) but he declined to entertain the same without any cogent reason. Find no merit in the action of the ld. CIT(A) for accepting the clarification regarding chain of documents which the assessee could not file before the A.O. As gone through all the chain of transactions which were through account payee cheques. All the bank statements are on record. The bank account of Late Kanta Hurkat was operated jointly by the husband of Late Kanta Hurkat and by Late Kanta Hurkat. Shri Manak Chand Hurkat continued to operate the bank account even after death of his wife. Merely because, husband of Late Kanta Hurkat did not inform the death of her wife to the bankers, the entire transaction of return of loan by assessee firm to Kanta Hurkat and issue of cheque by husband of Kanta Hurkat who was joint signatory in the bank account cannot be held to be non-genuine. Accordingly, find no merit in the action of the A.O. for making addition U/s 68 - Decided in favour of assessee.
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