2011 (12) TMI 7

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.... Pahuja: This appeal filed on 11.04.2011 by the Revenue against an order dated 14.02.2011 of the ld. CIT(A)-XXVI, New Delhi, raises the following grounds: - "1. On the facts and in the circumstances of the case, the ld. CIT(A) was not justified in deleting the addition of Rs. 20,00,000/- made by the AO u/s 68 of the I.T. Act, 1961 inspite of the fact that the assessee had failed to establish....

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....e sheet of the assesse as on 31.03.2007 revealed that his liabilities enhanced by  Rs. 20,00,000/- towards Sh. Pritam Goel. To a query by the AO, the assessee replied that to maintain credit limits enjoyed by the partnership firm, a journal entry was passed in the books of account of partnership firm M/s Lyra Industrials, whereby assessee's capital account was credited and his father Shri Pri....

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....n, holding as under: - "4.4 I have considered the submissions of the ld. Counsel, the AO's remand report and other facts on record. In this case there is no dispute that the loan of Rs. 20 lcas shown from Sh. Pritam Goel is only by way of book entry in the books of M/s Lyra Industrials. Neither the giver of loan nor the receiver of loan is claiming to have exchanged the sum of Rs. 20 lacs throu....

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....ansfer only through the respective accounts in the books of the concerns. After the transfer the firm has shown reduced balance in the case of Pritam Goel and an increased balance in the case of Suren Goel even though these has been no physical withdrawal of Rs. 20 lacs from Sh. Pritam Goel's account. The AO's observation that the transaction is sham is thus, misconstrued. The liability of Rs. 20 ....