Where the assessee has duly explained the source of income of the parties from whom unsecured loans are taken, the primary onus of the assessee is discharged ; if no further inquiry is undertaken , no addition can be made under section 68 of the I. T. Act, 1961

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Mrs. Nirmalaben C. Soni , vs ACIT [ITA No.3173/ AHD/2014]

Facts of the case
The assessee is engaged in the business of resale and job work of Gold and Silver Jewellery. The assessee, filed her return of income for A.Y. 2010-11 showing total income of Rs. 77,77,266/- through Electronic Media on 31.03.2011. Upon perusal of the Balance Sheet it revealed that unsecured loan amounting to Rs. 4,29,000/- was found to be taken by the assessee from three parties.

Assessee’s Contention

The ld. Counsel for the assessee contended that the loan which was taken from one of the parties was having a regular rental income details whereof have also been placed before the tribunal. The same was also evident from the order of the Learned CIT(A) before us. Similarly, in respect of the amount so taken as loan from remaining two parties, the genuineness of such transactions was also been supported by documents being Bank Statements of the concerned banks through which such amount has been paid to the assessee. It was further contended that one of the parties is running sugar factory and earning more than 4 lacs per annum, which is also evident from the Bank Statement of the Sugar factory submitted by him and thus his credit worthiness was established . The copy of the bank statement duly signed in support of the unsecured loan to the tune of rupees one lakh received by the assessee from another party was also submitted before the authorities below, thereby establishing the genuineness.

Crux of the case

In order to establish the genuineness of the transaction the assessee has supplied the relevant details of the concerned persons to the assessing officer and thus discharged her primary onus and further no inquiry was found in order to come to a conclusion before making addition in the hands of the assessee has been conducted by the learned AO. It is relevant to mention that all transactions were routed through banking channels and the assessee duly explained source of income of those creditors. The additions, therefore, cannot be made under section 68 of the act without due process of law.

Tribunal ruled in favour of the assessee.

Download full judgment at : https://www.itatorders.in/appeal/ita-3173-ahd-2014-14-mrs-nirmalaben-c-soni-surat-the-acit-circle-6-surat

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