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2016 (11) TMI 1301 - AT - Income TaxAddition u/s 68 - assessee contends that the Assessing Officer had made the addition without appreciating the fact that all the said amount of unsecured loans outstanding as on 31/3/2009 are outstanding in books of account for a long time and are reflected in previous years balance sheets - Held that - In our considered view a perusal of the CIT(A) s finding in the impugned order would clearly establish that the CIT(A) has not examined, verified or addressed the ground raised by the assessee and regrettably without any application of mind has parroted the finding of of the CIT(A). This finding in our view, is a travesty justice and the impugned order of the CIT(A) becomes unsustainable, as he has failed to examine and verify the contentions put forth by the assessee in the ground raised before him. In the event the said unsecured loans from three parties are found to be old loans and pertain to a period prior to the year under consideration, as contended by the assessee, then the addition under section 68 of the Act as upheld by the CIT(A) cannot be made or sustained. In this view of the matter, we are constrained in the interest of equity and justice to set aside the finding in the impugned order of the CIT(A) and restore the matter to his file to consider and adjudicate the grounds raised before him - Decided in favour of assessee for statistical purposes.
Issues:
Assessment of unexplained unsecured loans under section 68 of the Income Tax Act, 1961 for assessment year 2009-10. Analysis: The case involved the assessment of unexplained unsecured loans amounting to ?12,44,467/- taken from three parties by the assessee for the assessment year 2009-10. The Assessing Officer considered the loans as unascertained liability due to the lack of loan confirmations submitted by the assessee. Consequently, the amount was added to the taxable income of the assessee under section 143(3) of the Act. The CIT(A) upheld this addition, emphasizing that the burden of proof lies on the assessee to establish the genuineness of such loans. The CIT(A) noted that despite multiple opportunities, the assessee failed to provide complete details and confirmations of the unsecured loans. The CIT(A) referred to various court decisions to support the decision, highlighting the importance of documentary evidence to prove the identity, creditworthiness, and genuineness of creditors. The assessee, dissatisfied with the CIT(A)'s order, appealed to the Tribunal raising similar grounds as presented before the CIT(A). However, the Tribunal observed that the CIT(A) had not adequately addressed the contentions raised by the assessee in the appeal. The Tribunal noted that the CIT(A) failed to verify the claim that the unsecured loans were outstanding for a long time and were reflected in previous balance sheets submitted to the Assessing Officer. In light of this, the Tribunal found the CIT(A)'s decision unsustainable and directed a fresh consideration of the matter. The Tribunal emphasized the need for proper examination and verification of the grounds raised by the assessee, indicating that if the loans were indeed old and predated the assessment year, the addition under section 68 could not be justified. Consequently, the Tribunal set aside the CIT(A)'s decision and remanded the case for further examination and adjudication, allowing the grounds raised by the assessee for statistical purposes. In conclusion, the Tribunal allowed the assessee's appeal for assessment year 2009-10, emphasizing the importance of a thorough examination of the facts and proper consideration of the contentions raised by the parties involved in tax assessment cases.
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