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TMI Blog2015 (8) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction was carried out through this bank account and hence, we find no merit in the objection of the A.O that the HDFC Bank Account is not incorporated in Balance Sheet. Even if the assessee fails to establish the purpose for which the loan was stated to have been taken by the assessee, it cannot be said that for this reason alone, the loan is bogus and addition is called for. There is no merit in any of the objections of the A.O. The assessee has filed affidavits of all 98 persons and the A.O. called 10 person out of them and 9 appeared and confirmed. Hence, in our considered opinion, in the facts of the present case, there is infirmity in the order of CIT (A) on this issue - Decided against revenue. Unaccounted investment - addition u/s 69B deleted by CIT(A) - Held that:- CIT (A) has decided this issue on this basis that this difference is with regard to payment of stamp paper purchased in cash and it was explained before CIT (A) that this payment was made out of cash available in personal capacity. Learned CIT (A) held that in the facts of the present case, it is reasonable to accept that the assessee may be having some cash as personal savings and he accepted this claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issions of the assessee that saving bank account of HDFC Bank, in which deposits were made through loan obtained from 98 persons on personal ground, was her personal account and not a business account so information of above bank account and entries therein was not reflected in the books of account and without considering the facts that interest earned on deposits was also not incorporated in computation of income. The Ld CIT (A) II, Lucknow has also not examined the unusual pattern of loan taken from 98 different persons who are neither relative nor family members which creates doubt over the genuineness of so called loan taken by the assessee. In doing so, the Ld CIT (A) II, Lucknow has also erred in law and on facts in deleting the addition of ₹ 18,00,000/- without appreciating the findings made by the Assessing officer in this regard. 6. Learned DR of the revenue supported the assessment order and learned AR of the assessee supported the order of CIT (A). 7. We have considered the rival submissions and gone through the orders of the lower authorities. We find that learned CIT (A) has decided this issue as per Para 5 (2) to 5(6), which are reproduced below:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... instructions. In our view, the Tribunal was justified in the conclusions at which it arrived. 5(2)(ii) The AO is therefore not justified in invoking the provisions of section 68 of the Act. The AO has wrongly invoked the provisions of section 68 of the Act as the amount was found credited in the bank account of the assessee and not in any books of accounts. The nature and source of deposit in the bank account of the appellant is therefore to be examined with reference to Section 69 of the Act. The requirements of section 69 of the Act are different from the requirements of section 68 of the Act. However, wrong quoting of relevant section does not vitiate the addition made. 5(3) The essential facts worth mentioning is that the appellant in support of loans taken filed affidavits of all the 98 persons. The AO insisted on production of 10 persons as per serial numbers 5, 15, 25, 35, 45, 55, 65, 75, 85, and 95 as mentioned in paragraph 4 on page 2 of the assessment order. The appellant produced 9 persons out of the 10 called by the AO. Shri Dinesh Kumar mentioned at serial number 95 could not be produced. Statement on oath of 9 persons was recorded by the AO on 27.12.2012. All th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 88 persons without cross examination. Even in case of other persons, 9 out of 10 persons who appeared have confirmed the loans. As regards non-filing of details of land purchased for which loans were taken, 1 find that the AO has misdirected his findings. The issue is the veracity of loans taken from 98 persons amounting to ₹ 18,00,000/-. The utilization of the loan taken is not an issue. 5(5) I find from my examination that when the assessee has filed confirmations of the cash creditors in the form of affidavits which have not been disproved, the initial burden placed upon the assessee can be said to have been discharged and if there is any doubt with regard to the creditworthiness, the Assessing Officer should have directed the assessee to produce the creditors or would have examined the creditors directly and in the absence of taking such recourse, the Assessing Officer was not justified in taking an adverse inference with regard to the creditworthiness of the creditors. A reference in this connection may be made to the decision of Hon'ble Third Member ITAT, Lucknow Bench in the case of Vishnu Jaiswal Vs ITO in ITA No. 336 (LKW.) of 2011 dated MAY 1, 2012 wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a personal account. It is not shown by the revenue that any business transaction was carried out through this bank account and hence, we find no merit in this objection of the A.O. 8.1 Regarding the second objection, we find that out of 98 persons, the A.O. asked 10 to appear and 9 appeared before him and confirmed the claim of the assessee about receipt of loan from them. There is a categorical finding of CIT (A) that 9 out of 10 persons who appeared have confirmed the loans and no material was with the A.O. to discard the evidence filed in the form of affidavits. Regarding credit worthiness of lenders, it is observed by CIT (A) that if the A.O. had doubts, the A.O. should have directed the assessee to produce the creditors or would have examined the creditors directly and without doing so, the A.O. in taking an adverse inference. Learned CIT (A) has followed a Third Member tribunal order rendered in the case of Vishnu Jaiswal in ITA No. 336/LKW/2011 dated 01.05.2012. Considering all these facts, we find no merit in this objection of the A.O. also. 8.2 Regarding the third objection, we do not find any merit therein because even if the assessee fails to establish the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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