LALCHAND B. VASANI,,AHMEDABAD vs. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCEL-12,, AHMEDABAD

The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals)-6, Ahmedabad (CIT(A)’ in short), dated 30.12.2016 arising in the assessment order dated 27.02.2014 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2011-12.

As per grounds of appeal, the assessee has challenged the action of the CIT(A) in confirming the addition of Rs.10 Lakhs under s.68 of the Act being deposit received from one Fahranhet Infrastructure P. Ltd.

The learned DR for the Revenue relied upon the order of the lower authorities.

We have carefully considered the rival submissions and perused the assessment records. We find that the confirmation of the lender was filed. The AO has resorted the provisions of Section 68 of the Act on credit received from the lender on the ground that summons issued to the lenders have not been properly responded and the lender has not filed return of income. We do not see the action of the Revenue to be sustainable in law. The assessee in the instant case has demonstrated that the money has travelled to the assessee through banking channel and thereafter returned promptly through banking channel. The bank statement of the lender is testimony to this fact. No cash is alleged to have been deposited in the bank of the lender prior to the act of lending to the assessee. Therefore, a benign view is required to be taken having regard to the totality of the circumstances. We thus answer the issue in affirmative and in favour of the assessee.

In the result, the appeal filed by the assessee is allowed.