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2010 (8) TMI 1106

yagi, JM The revenue is aggrieved by the order of the Ld. CIT(A), Kolkata dated 07.01.2010 for assessment year 2006-07 in deleting the addition of ₹ 16,25,961/- being undisclosed cash credit u/s. 68 of the I. T. Act. 2. Briefly stated facts of the case are that the assessee filed return of income on 16.10.2006 disclosing total income of ₹ 1,62,982/-. The AO vide his order passed u/s. 143(3) assessed the total income of the assessee at ₹ 17,90,940/-. During the course of assessment proceedings, the AO found that the assessee took loans from friends and relatives and ₹ 16,25,961/- was outstanding at the end of the year. The AO examined the details of loan enclosed with the return and issued summons u/s. 131 to some of .....

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e cheques for loans. The AO, therefore, rightly held that the loans represented money of the assessee routed through the loan creditors and added the amount u/s. 68 of the I. T. Act. He lastly concluded that the Ld. CIT(A) has erred in deleting the said addition ignoring the findings given by the AO at the assessment stage. He, therefore, urged before the bench to set aside the order of the Ld. CIT(A) and restore that of the AO. 4. On the other hand, the Ld. counsel for the assessee relied on the order of the Ld. CIT(A) and urged before the bench to confirm his action. He also submitted that to prove the creditworthiness of the loan creditor the assessee filed copies of acknowledgement of I. T. Return P & L Account, Balance Sheet, Loan .....

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ccount and deposits from personal account. He lastly concluded that as the nature and source of the said amounts has already been explained before the AO and the creditworthiness and genuineness of the parties has been proved, the assessee has complied with the requirements of section 68 of the I. T. Act. He lastly supported the order of the Ld. CIT(A) and urged before the bench to confirm his action 5. After hearing the rival submissions, perusing the material available on record and the case laws cited by the Ld. Counsel for the assessee, we find that the Ld. CIT(A) has given relief to the assessee by passing a speaking order and after obtaining the report of the AO on the submissions made before him by the assessee in respect of creditwo .....

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Vegetable Oil Co P Ltd are filing return of incomes since several years and the balances of the cash creditors were duly reflected in the said concern. In response to the above letter a reply was received from the AO vide letter no. ITO, Wd.38(1)/Remand/ 09-1O/Kol/ 104 dated 20.08.2009. In this letter the AO submitted that the entire amount of ₹ 35,30,000/- represented unexplained cash credit and only by mistake amount of ₹ 16,25,961/ - was added. It was further stated by the AO that from the bank statement it was amply evident that without the alleged receipts from Swastik Refinery P Ltd / Shri Vegetables P Ltd /withdrawal from PPF amount the cash creditors did not have the creditworthiness to advance the loans and therefore t .....

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sources of funds out of which the loans had been given. Some of the depositors were even examined by the AO during the course of assessment proceedings and nothing has been brought on record by the AO to show that in their depositions they have denied giving the loans or that their creditworthiness was not established. Once the depositors have accepted the fact that the amounts have been advanced by them by way of banking channels and they have produced their bank statements in support of their contention no adverse inference can be drawn in the hands of the appellant merely on the ground that before the issue of loan cheques an equivalent amount was deposited in the account of the depositors. The onus to explain the deposit in their bank a .....

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