RAJU DHIMAN ACHARYA,MEERUT vs. ACIT, MEERUT

The only issue raised in this appeal is against the confirmation of addition of Rs.10, 50,000/- made by the AO u/s 68 of the Act.

Briefly stated, the facts of the case are that the assessee showed to have received unsecured loans amounting to Rs.10,50,000/- from 55 persons. On being called upon to substantiate the genuineness of these loans, the assessee submitted that these were nominal amounts of loans ranging between Rs.17,000/- to Rs.19,500/- for which vouchers were got signed by the lenders and their identities were duly disclosed. These were stated to be the transactions of borrowing by the assessee, for whose repayments the assessee issued promissory notes. The AO called upon the assessee to produce the creditors. In the absence of the production of 55 persons, the AO made addition of Rs.10,50,000/-, which came to be confirmed in the first appeal.

I have heard the rival submissions and perused the relevant material on record. It is noticed that the AO required the assessee to produce 55 persons by way of order sheet entry dated 16.12.2010. A time limit of six days was given for doing the needful. The assessee was preoccupied due to illness of his parents as a result of which the creditors could not be produced. At a gap of six days, the AO passed the order on 22.12.2010 making the addition for the said amount. The ld. AR contended that due to paucity of time allowed by the AO and the circumstances prevailing at that time, the assessee was incapacitated to produce the persons. It was claimed that now the assessee was ready to produce as many creditors as the AO wanted. That is how a request was made for restoration of the matter to the AO. I agree with the contention in the backdrop of the fact as noted above by means of which a very short time was given by the AO for producing these persons. Resultantly, the impugned order is set aside and the matter is restored to the file of AO for a fresh decision on this issue in accordance with law, after allowing a reasonable opportunity of being heard to the assessee.

In the result, the appeal is allowed for statistical purposes.