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of <h1>Assessee wins appeal against Section 68 addition after proving loan creditor's identity, transaction genuineness, and creditworthiness through banking channels</h1> <h3>Poddar Realtors Versus Income Tax Officer, Ward-2 (1), Burdwan</h3> Poddar Realtors Versus Income Tax Officer, Ward-2 (1), Burdwan - [2024] 109 ITR (Trib) 605 (ITAT [Kolk]) Issues:The appeal challenges the addition of Rs. 25,00,000 made under section 68 of the Income Tax Act, 1961 for the Assessment Year 2013-14, regarding the unexplained cash credit received by the assessee.Summary:Issue 1: Addition of Rs. 25,00,000 under section 68The assessee contested the addition of Rs. 25,00,000 made under section 68, arguing that the reasons for reopening the assessment were based on incorrect assumptions. The assessee provided evidence to establish the identity, creditworthiness, and genuineness of the loan transaction. The tribunal found that the reasons recorded prior to reopening were factually incorrect and untenable. The lender had sufficient funds to provide the loan, and all relevant documents supported the legitimacy of the transaction. Therefore, the tribunal set aside the addition under section 68.Issue 2: Burden of Proof and Legal PrecedentsThe assessee argued that the burden of proof had been met by providing evidence regarding the identity of the lender, genuineness of the transaction, and creditworthiness of the lender. Legal precedents were cited to support the contention that once the initial burden of proof is discharged by the assessee, it shifts to the Assessing Officer to justify any additions under section 68. The tribunal agreed with the assessee's position and emphasized the importance of examining all evidence objectively before making any determinations.Conclusion:After careful consideration of the facts and legal arguments presented, the tribunal concluded that the assessee had successfully proven the legitimacy of the loan transaction. The lender's identity, creditworthiness, and the genuineness of the transaction were adequately demonstrated through documentary evidence. As the loan was repaid in the subsequent year, the tribunal found no justification for invoking the provisions of section 68. Therefore, the tribunal allowed the appeal and deleted the addition of Rs. 25,00,000 made under section 68 of the Act.Note: Separate judgments were not delivered by the judges mentioned in the case.
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