COMMISSIONER OF INCOME-TAX Vs. N.P. GARODIA

JUDGEMENT

(1.) THE respondent -assessee was assessed to tax while taking into consideration the unexplained credits amounting to Rs. 29 lakhs as income under Section 68 of the Income -tax Act, 1961 (hereinafter referred to as 'the Act'). The Assessing Officer had also declined the claim of the assessee in deduction of a sum of Rs. 3,25,735, claimed as interest, which had allegedly been paid by the assessee on the aforestated loans. In furtherance of a notice issued to the assessee under Section 143(2) of the Act, the assessee made available to the Assessing Officer confirmation letters and particulars depicting that he had taken the aforesaid amount of Rs. 29 lakhs as loans. He also revealed the source(s) from which the said loan(s) had been taken.

(2.) IT is not a matter of dispute before us, that the loans under consideration were extended to the assessee by way of transactions through normal banking channels. It is also not a matter of dispute, that the loanees who had extended the loans to the respondent -assessee had extended similar loans for earlier years as well. In the aforesaid view of the matter, there cannot be any dispute about the fact that the nature and the source of the loans came to be appropriately disclosed by the respondent assessee to the Assessing Officer.

(3.) THE final order passed by the Income -tax Appellate Tribunal dated February 22, 2008, which is the subject -matter of challenge at the hands of the Revenue through the present appeal, has taken into consideration the fact that the respondent -assessee had moved an application under Section 131 of the Act, requiring the Assessing Officer to summon the loanees, and since the Assessing Officer had taken no action whatsoever to do so, the respondent -assessee had not been afforded an adequate opportunity of discharging the onus placed on his shoulder under Section 68 of the Act.