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2022 (11) TMI 19 - AT - Income TaxUnexplained cash credit u/s 68 - assessee failed to offer any explanation regarding the source and nature of the deposit, the assessing officer added back the amount u/s 68 - HELD THAT:- As prior to the issue of cheque to the assessee, the lender had sufficient fund available with him. From the aforesaid evidences available on record, the following facts emerge, firstly, the identity of the creditor has been established, secondly, the transaction has been made through banking channel by way of account payee cheque and thirdly, the lender has funds available with him to advance the amount. As could be seen, only because the lender did not comply with the summons issued under Section 131 of the Act, the addition has been made. Non-compliance with the summons issued u/s 131 of the Act can be for various reasons. However, that cannot be the solely criteria to treat the loan received as unexplained cash credit u/s 68. Unfortunately, learned first appellate authority has decided the issue in a very cryptic manner without independent application of mind. When the transaction has been carried out through banking channel by way of account payee cheque, it is not understood how there can be an issue regarding the genuineness of the transaction. Nothing prevented the departmental authorities to exercise the statutory powers vested in them to get to the root of the matter, irrespective of the fact that the lender did not comply with the summons issued u/s 131 - when the assessee has discharged his initial onus to prove the source and nature of deposits made in the bank account, the burden shifts to the department to prove the contrary, which, in my view, the department has failed to discharge. Appeal of assessee allowed.
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