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TMI Blog2023 (6) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... d through banking channels in the garb of loan, the impugned addition could not be sustained in law. The assessee was not expected to prove the source of source as held by Hon ble Supreme Court in the case of M/s Lovely Exports (P.) Ltd.[ 2008 (1) TMI 575 - SC ORDER] - Therefore, we direct Ld. AO to delete the impugned addition. The assessee s appeal stand allowed accordingly. Validity of reassessment proceedings - absence of any tangible material - HELD THAT:- We find that the original return of income was scrutinized u/s 143(3). The case was reopened within 4 years. The perusal of assessment order would show that Ld. AO has not referred to any tangible material coming into his possession which would lead to formation of a belie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has noted delay of 3 days in both the appeals which stand condoned. 2. The impugned issue stem from the fact that the assessee admitted loan of Rs. 16.47 lacs from Mr. Ramachandran. The assessee filed address of the lender along with confirmation letter dated 27.02.2000 from M/s H.M.C. Fabrics Private Ltd. The loan was stated to be received through Indian Bank DD No.787070 dated 19.03.1997. The sworn statement of the lender was recorded wherein lender assured the authorities to furnish copies of account for M/s H.M.C. Fabrics Pvt, Ltd. as proof of sources for the remittances. However, he failed to do so. It was further found that M/s H.M.C. fabrics Pvt. Ltd. had not commended the production for the year ended 31.03.1994. The copies of fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same, Ld. CIT(A) upheld the addition against which the assessee is in further appeal before us. 4. From the stated facts, it could be seen that the assessee has admitted loan of Rs. 16.47 lacs from Mr. Ramachandran. In terms of requirement of Sec.68, the assessee was obligated to prove the identity of the lender, their respective creditworthiness and the genuineness of the transaction. During the course of assessment proceedings, the assessee filed address of the lender along with confirmation letter dated 27.02.2000 from M/s H.M.C. Fabrics Private Ltd. in support of the transaction. Undisputedly, the loan has been received through banking channels. Before DDIT (Inv.), the lender appeared and his sworn statement was recorded wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001-02 5. The sole issue in AY 2001-02 is addition of Rs. 18.17 Lacs. The assessee also assails the validity of reassessment proceedings on the ground of absence of any tangible material. Having heard rival submissions, the appeal is disposed-off as under. 6. The original return of income was scrutinized u/s 143(3) on 27-02- 2004 determining the income at Rs. 4.90 Lacs. Subsequently, it was seen that the assessee derived income from House Property for Rs. 18.17 Lacs which was not disclosed in the return of income. Accordingly, the case was reopened and notice u/s 148 was issued on 17-03-2006 which is within 4 years from the end of relevant assessment year. The assessee objected to proceedings on the ground that there was no escape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eet relating to AY 2001-02 did not reflect any profit at all. The reconciliation statement now filed by the assessee on the basis of Balance sheet filed before first appellate authority could not be considered. Accordingly, the impugned addition was made. 8. During appellate proceedings, the assessee filed reconciliation of balance as on 31.03.1993 and 01.04.2001 along with financial statements for various years. The assessee also assailed validity of reassessment proceedings on the ground that there was no escapement of income which was rejected by Ld. CIT(A). On merits, Ld. CIT(A) upheld the action of Ld. AO on the ground that the assessee did not carry out any business. The credit balance lying in Profit Loss Account was to be credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the merits of the case has been rendered infructuous. The case law of Hon ble High Court of Madras in Cognizant Technology Solutions India (P.) Ltd. vs. ACIT (129 Taxmann.com 327), as referred to by revenue, is distinguishable on facts. In that case, the reasons recorded by Ld. AO revealed that certain relevant information and materials were not considered by Assessing Officer which would have to be taken into consideration while passing assessment order. The same is not the case here and there is no such allegation by Ld. AO in the present case. Accordingly, this case law renders no assistance to the case of the revenue. Conclusion 10. Both the appeals stand allowed in terms of our above order. Order pronounced on 23rd June, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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