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2023 (8) TMI 920 - AT - Income TaxUnexplained investment/unexplained cash credit under section 68 69 - What's the source of investment in the purchase of property? - Assessee submitted that it was out of credits and repayment of loan given by the assessee to the respective parties during previous financial period - HELD THAT - AO made addition by invoking provisions of 68 69 simultaneously without specifying as to whether he wants to treat the impugned amount as unexplained investment or as unexplained credit. CIT(A) uphold the addition by treating the same as unexplained investment u/s. 69 of the Act. On the other hand, as we have discussed above in detail, based on uncontroverted documentary evidence filed by the assessee, that the creditworthiness of all four lenders and genuineness of transactions is clearly established by the assessee and there is no iota of doubt in this regard. Therefore, no addition is called for on account of baseless allegation of unexplained investment by the assessee u/s. 69 - Accordingly, the main effective grounds of assessee are allowed and AO is directed to delete the addition. Appeal of the assessee is allowed.
Issues Involved:
1. Addition of Rs. 1,48,50,000/- as unexplained investment/unexplained cash credit under sections 68 and 69 of the Income Tax Act, 1961. 2. Rejection of additional evidence by the CIT(A) without providing proper opportunity to the assessee. Issue 1: Addition of Rs. 1,48,50,000/- as unexplained investment/unexplained cash credit under sections 68 and 69 of the Income Tax Act, 1961 The assessee argued that the CIT(A) erred in sustaining the addition of Rs. 1,48,50,000/- as unexplained investment/unexplained cash credit under sections 68 and 69 of the Income Tax Act, 1961. The assessee submitted that the amounts received were repayments of loans given to various parties in earlier years, and thus, could not be treated as unexplained investments. The assessee provided detailed documentary evidence, including bank statements, account confirmations, PAN details, and ITR copies, to establish the identity and creditworthiness of the lenders and the genuineness of the transactions. The Tribunal found that the Assessing Officer (AO) and CIT(A) did not properly verify or examine the documentary evidence provided by the assessee. The Tribunal noted that the AO made the addition without specifying whether it was under section 68 or 69 and failed to make necessary inquiries. The Tribunal concluded that the assessee successfully demonstrated the identity and creditworthiness of the lenders and the genuineness of the transactions. Consequently, the Tribunal directed the AO to delete the addition. Issue 2: Rejection of additional evidence by the CIT(A) without providing proper opportunity to the assessee The Tribunal evaluated the order of the CIT(A) dismissing the assessee's prayer for admission of additional evidence. The CIT(A) denied taking the additional evidence on record, stating that the evidence was available during the assessment proceedings. However, the Tribunal found that the CIT(A) ignored the reasons provided by the assessee for not submitting the documents earlier. The Tribunal held that the CIT(A) was not justified in dismissing the prayer for admission of additional evidence and noted that the CIT(A)'s actions were self-contradictory and perverse. Conclusion The Tribunal allowed the appeal of the assessee, directing the AO to delete the addition of Rs. 1,48,50,000/-. The Tribunal found that the assessee successfully established the identity and creditworthiness of the lenders and the genuineness of the transactions, and that the CIT(A) erred in rejecting the additional evidence without proper consideration.
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