2014 (3) TMI 326 - AT - Income Tax

Genuineness of the Transaction - Creditworthiness of Dr Brijendra Singhal - Held that - The loan of Rs. 8.00 lacs duly stands proved - The statement of the assessee recorded by the AO confirmed the loan - The statement who is brother-in-law of the assessee also confirmed the advance of the loan - There is a natural love and affection between such relations and at the behest, anybody like sister and brother-in-law would help in Indian society - mental condition of the father of the assessee was not good state and therefore, he was not aware of this loan. Dr Brijendra Singhal is a NRI and he has explained his source of income and he has also mentioned his bank account and his NRI account through which the amount is routed there was no force in the revenue s contention that why should the brother-in-law would give a loan of Rs. 8.00 lacs and would not demand it back the amount of loan stand thoroughly proved on record and nothing more is required to prove this loan Decided in favour of Assessee.

Issues involved:
Assessment order validity under section 143(3), Credit worthiness of loan giver, Addition confirmed by CIT(A), Genuinity of loan from brother-in-law, Acceptance of additional evidences, Proof of loan amount, Burden of proof on the assessee.

Analysis:

1. Assessment order validity under section 143(3):
The appeal was against the order of the ld. CIT (A) for the assessment year 2007-08. The appellant contended that the order passed by the AO under section 143(3) was bad in law. The Tribunal admitted additional evidences and directed a de novo assessment to examine the issue in light of the admitted evidences.

2. Credit worthiness of loan giver:
The case involved the credit worthiness of Dr. Brijendra Singhal, who had given a loan to the assessee. The AO did not rely on Dr. Singhal's statement regarding the loan due to lack of supporting evidence. The Tribunal directed the AO to re-examine the issue with all evidences and documents submitted by the assessee.

3. Addition confirmed by CIT(A):
The ld. CIT(A) confirmed the addition made by the AO in the assessment. The assessee produced additional evidences, including affidavits and medical certificates. The Tribunal considered the statements of the assessee and Dr. Singhal, confirming the loan, and ruled in favor of the assessee.

4. Genuinity of loan from brother-in-law:
The main issue revolved around the genuinity of the loan of Rs. 8.00 lacs allegedly received by the assessee from his brother-in-law, Dr. Brijendra Singhal. The Tribunal found that the loan stood proved based on the statements of the assessee and Dr. Singhal. The Tribunal emphasized the natural love and affection between family members as a reason for the loan.

5. Acceptance of additional evidences:
The Tribunal accepted the additional evidences produced by the assessee, including statements and documents, to support the claim of the loan. The Tribunal considered the circumstances, mental condition of family members, and the source of income of the loan giver in reaching the decision.

6. Proof of loan amount and Burden of proof on the assessee:
The Tribunal concluded that the loan amount of Rs. 8.00 lacs was thoroughly proved on record through statements and documents. The burden of proof was considered discharged by the assessee, and the Tribunal ordered the deletion of the impugned addition based on the evidence presented.

In conclusion, the Tribunal allowed the appeal of the assessee, ruling in favor of the genuinity of the loan and ordering the deletion of the addition made by the AO.

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