2014 (5) TMI 549

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....ent reads as under : "2. The CIT(A) erred in deleting the addition of Rs. 12 lakhs made towards unexplained credits when the creditworthiness of the creditors is not proved." 2. Briefly the facts are, the assessee an individual is engaged in the business of executing civil contract work and consultancy services. The assessee is also partner in three partnership firms namely, M/s. Sigma Constructions, M/s. Vista Constructions and M/s. New Vista Constructions. Survey under section 133A of the Act was conducted in the business premises of M/s. Sigma Constructions on 25.02.2010. It is noted by the A.O., the information found during survey revealed huge investments made by these firms in purchase of properties. It is stated, during survey ....

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....he loan of Rs.50,50,000/- availed from Mohd. Irfanuddin. So far as investment of balance amount of Rs.37,50,000/- (Rs.12,00,000 loan + Rs.25,50,000/- own investment) is concerned, the A.O. disbelieving the explanation of the assessee treated it as unexplained investment and added it to the income of the assessee. The assessee challenged the addition before the Ld. CIT(A). As the department in the present appeal has only challenged the deletion of Rs. 12 lakhs representing loan from two persons, it is necessary to deal with the facts relating to this issue alone. In course of hearing of appeal before the Ld. CIT(A) the assessee submitted that loan of Rs.10,00,000/- was actually availed from Mr. M.A. Khuddus and not Dr. Gopal Rao as indicated....

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....s of transaction and the creditworthiness of the creditors. Same is the case with the credit of Rs.2,00,000 from Mr. Faizuddin, who has furnished the confirmation for the loan. Under the circumstances, it can be held that the credits from Mr. Khuddus to the extent of Rs.10,00,000 and Rs.2,00,000 from Mr. Faizuddin stand explained, and provisions of sec.68 are not attracted to treat them as unexplained credits, in the instant case. Hence, the addition to the extent of Rs.12,00,000 as unexplained credits stand deleted." 5. We have heard the Ld. D.R. and perused the orders of the revenue authorities. It is a fact on record that the assessee has not only produced confirmation letter of the creditor Mr. Mohd. Abdul Khuddus confirming loan of ....