ASHOK KUMAR NARULA,DELHI vs. ACIT, NEW DELHI

ORDER

PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER

Sh. Ashok Kumar Narula, Delhi 2.1. Aggrieved the assessee carried the matter before the First Appellate Authority. The Ld.CIT(A) dismissed the appeal of the assessee. 2.2. Further aggrieved the assessee is in appeal before us on the following grounds . “1. That the Ld.A.O. has erred on facts and in law in completing the assessment at an income of Rs.10.98,720/- as against returned income of Rs.5,98,720/- by the appellant.

2. The AO has without applying his mind and without understanding the facts of the case added the amount of Rs.5,00,000/- as unexplained deposits.

3. The AO has acted casually without appreciating the fact that the assessee has not received Rs.1,00,000/- unlike mentioned in the Assessment orders. Hence, the order suffers from factual infirmity and hence bad and void.

4. The AO has failed to mention the factual position correctly on record in the order about the statement given before him. The order is based on conjecture and surmise, hence void ab initio.

5. The AO has erred in facts by not mentioning in the orders the complete facts and documents placed and submitted before him during assessment. Hence assessment based on partial records is merely an assessment of convenience and biased. Accordingly such assessment is liable to be quashed.

6. The AO is not justified in making addition under section 68 as unexplained deposit whereas all the documents and papers like bank statement, Copy of Election card, copy of documents related to his income from farming , etc were submitted before AO to prove the identity, genuineness and creditworthiness of the lender.

7. The AO has not given proper opportunity or show cause for his intention of making the above addition which is against the principles of natural justice.

8. That the appellant craves, leaves to add, amend, and delete any other ground of appeal.”

Sh. Ashok Kumar Narula, Delhi 4. On a careful consideration of the facts and circumstances of the case, perusal of papers on record and orders of the authorities below, as well as case laws cited, we hold as follows.

5.1. Coming to the loan of Rupees four lakhs, we find that Mr Balvinder Singh has confirmed that he has lent the said amount as loan to the assessee. The assessee has filed the following documents in support of his contention that the transaction of loan is genuine. These evidences are: a. Confirmations from lender for loan aggregating Rs.5 lakhs b. Copy of Election Card of the Lender to prove his identity c. Copy of bank statement duly reflecting the loan transaction indicating his credit worthiness d. To substantiate the source of funds for lending to the appellant, copies of bills of sale proceds of agricultural commodities (From J) derived out of the family land holding (in the name of his father) were submitted before CIT(A) as additional evidence as the appellant could not obtain them from lender during assessment proceedings.

5.2. In our view the assessee has produced all necessary and possible evidence to prove the identity, creditworthiness, and genuineness of the transaction. The A.O. has simply rejected these evidences. There is no independent investigation by the A.O. There is no material with the A.O. to disprove the claim of the assessee. The Ld.CIT(A) has failed in his duty to properly appreciate the evidences.

Sh. Ashok Kumar Narula, Delhi The assessee has also produced evidence in the form of repayment of the above loan to Mr Balvinder Singh to further substantiate his claim. The payments have been done through banking channels. In view of the above evidences, the addition in question has to be deleted. We therefore delete the addition and allow the appeal filed by the assessee.