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2015 (2) TMI 402 - ITAT HYDERABADUnexplained credit under section 68 - Held that:- A majority of the creditors have also appeared either in person or through their Authorised Representatives before the A.O. and have confirmed of having advanced the loan to the assessee. It is also evident that all the loan transactions were through regular banking channel. Many of the creditors are also income tax assessee’s and not only their income tax particulars but the income tax returns filed by them along with balance sheets etc., were also submitted before the A.O. either by assessee or directly by those persons. It also appears from the facts on record that in case of many of the creditors, the assessee has subsequently repaid the loan, also through regular banking channel. It also appears that during the currency of the loans assessee also credited interest to the concerned loan creditors through banking channel. Under these circumstances, when the entire transaction is through regular banking channel, the loan received by the assessee cannot be treated as unexplained credit merely on the assumption that the creditworthiness of the creditors are not proved. When the loan transaction is through banking channel to prove that it is not genuine, the A.O. has to make proper enquiry and establish it on record by bringing sufficient evidence that it is the assessee’s money which has been routed back to him through the creditors. Unless this fact is proved through proper enquiry, it will not be proper to treat the loan transaction as not genuine on conjecture and surmises.Therefore, on overall consideration of facts and materials on record, we are of the view that the entire issue relating to the loan transactions representing the 78 creditors requires re-examination. More so, considering the specific grievance of the assessee that adequate opportunity to explain was not given to him. Having held that issue relating to loan transactions requires re-examination, it is necessary also to decide whether A.O. or CIT(A) will be the appropriate authority to decide it afresh. In this context, it needs to be observed each of the loan transaction has to be examined independently in the context of the evidences produced relating to it along with the explanation of the assessee for determining the genuineness. Since the A.O., in our view, has not undertaken such exercise in respect of each of the loan transaction and rather has come to his conclusion by making general observations, we are inclined to remit the matter back to him for fresh examination. - Decided in favour of assessee for statistical purposes.
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