SMT. SANGEETA SANGWAN,NEW DELHI vs. ITO, GURGAON

This appeal filed by the assessee is preferred against the order of the CIT(A)-1, Gurgaon dated 23.09.2016 for A.Y.2012-13.

The solitary grievance of the assessee is that the CIT(A) erred in confirming the addition of Rs.59 lacs made u/s. 69 A of the Act by the AO.

Briefly stated the facts of the case are that during the course of the scrutiny assessment proceedings the AO noticed credit entries of Rs.59 lacs in the account of the assessee. The assessee was asked to explain the credit of Rs.59 lacs. The assessee explained that the said amount was borrowed by her from her brother in law Daljit Singh. The AO asked the assessee to prove the identity, creditworthiness and genuineness of the transaction and the capacity of the lender. On receiving no plausible reply the AO completed the assessment by making addition of Rs.59 lacs as alleged unsecured loans u/s. 69 A of the Act.

The assessee carried the matter before the CIT(A) and vehemently contended that Rs.59 lacs was borrowed through various cheques. It was contended that the entire transaction has been made through banking channel. It was explained that Sh. Daljit Singh was hospitalized and was not in a position to confirm the transaction but the same is verifiable from the bank statements. The CIT(A) was convinced that the assessee has failed to discharge the initial burden cast upon her and confirmed the addition.

Before us the counsel for the assessee reiterated what has been stated before the lower authorities.

Per contra the DR strongly supported the findings of the AO and reiterated that the assessee has failed to discharge the primary onus.

We have carefully considered the orders of the authorities below. It is true that Rs.59 lacs have been borrowed by the assessee through various cheques as under :-

The claim of the assessee that the impugned amount has been borrowed from her brother in law Sh. Daljit Singh cannot be brushed aside lightly merely because Sh. Daljit Singh could not be produced before the AO for confirmation of the transaction.

We are of the considered view that if at the assessment stage and at the stage of the first appellate proceedings Sh. Daljit Singh was incapaciated and could not appear before the AO, the assessee should get one more opportunity to confirm the transaction of the loan by Daljit Singh.

Therefore, in the interest of justice and fair play we set aside the assessment to the files of the AO. The assessee is directed to prove the identity, creditworthiness and genuineness of the transaction by bringing on record cogent material evidences. The AO is directed to examine the same and decide the issue afresh after giving a reasonable and fair opportunity of being heard to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purpose.

Decision announced in the open court in the presence of both representatives on 28.10.2021.