The assessee, Ashish Sumatibhai Shah raised the issue whether AO has erred in making addition of Rs.22,91,000 under section 68 of the income tax act 1961.
The assessee in the course of hearing, strenuously harped on the fact that the loss have been taken for a very brief period and also repaid through banking channel in the same financial year in respect of loans taken from Sarojben Shah, Wonderworld (INC) and Satnam Electric & Service Centre.
It was further pointed out that loans of Rs.10 lakhs obtained from S. Kumar Computers Pvt. Ltd. has also been repaid in the next financial year.
The assessee strongly asserted that where the loans obtained has been duly repaid, the assessee does not stand to benefit at all and consequently pleaded that the bonafides of the transaction requires to be seen having regard to the entirety of the facts.
It was submitted that there is no justification for the Revenue to increase the assessed income on account of loans already repaid. So, the onus which lay upon the assessee has been broadly discharged in these peculiar circumstances.
The coram headed by the Vice President Rajpal Yadav and Pradeep Kumar Kedia considered it appropriate to set aside and restore the issue back on account of additional respect of such loans of Rs.22,91,000 to the file of Assessing Officer.
The ITAT directed the AO to verify the factual aspects on claim of repayment to the party and if found proper, is directed to grant appropriate relief. It shall be open to the Assessing Officer to make appropriate inquiry from the bank to ascertain the fact of repayment to the lenders, if so considered expedient.
The tribunal held that the action of CIT(A) is cancelled and the additions made on account of receipt from aforesaid four parties is remitted back to the file of the Assessing Officer for necessary verification as noted above to enable him to pass a fresh order in accordance with law.Subscribe Taxscan AdFree to view the Judgment