INCOME TAX OFFICER, FEROZEPUR CANTT vs. AROZEPAL SANDHU, VILLAGE RATTA KHERA

The assessee is stated to be running a petrol pump. During assessment proceedings, it transpired that the assessee obtained loans from 5 parties during the year which have been tabulated at Para-3 of the assessment order. The assessee could not furnish requisite documents to the satisfaction of Ld. AO with respect to 4 parties and accordingly, the loans of Rs.289.55 Lacs were added as unexplained cash credit u/s 68.

During first appeal, the assessee furnished additional evidences to substantiate these loans which were subjected to remand report of Ld. AO. The assessee obtained loan from his parents. In support of the same, the assessee furnished affidavit of the lenders, copy of bank statement of lenders, copy of jamabandi of agricultural land pledged for raising OD limit from HDFC bank from where the loans were advanced to the assessee. With respect to remaining lenders, the assessee furnished confirmation copy and bank statements of lender entities. The Ld. AO, though supported the impugned addition, could not make any specific comment on the claims as made by the assessee with respect to the genuineness and the creditworthiness of the lenders. The only doubt raised was that the loans were repaid within few days and the purpose was not explained by the assessee. Considering all these facts, Ld. CIT(A) deleted the impugned addition against which the revenue is in further appeal before us.