COMMISSIONER OF INCOME TAX Vs. JAI KUMAR BAKLIWAL

JUDGEMENT

(1.) This appeal u/s 260-A of the Income Tax Act, 1961 (for short, "IT Act") has been preferred by the appellant-revenue against the order of the Income Tax Appellate Tribunal (for short, "ITAT") dt.06/08/2010 passed in ITA No.349/JP-2009 by which the ITAT has dismissed the appeal filed by the appellant-revenue against the order of the Commissioner of Income Tax (Appeals), Ajmer (for short, the "CIT(A))". The relevant assessment year is the assessment year 2006-07.

(2.) The brief facts, as emerging on the fact of record, are that the respondent-assessee is carrying on the business of finance and earns income by way of interest and during the course of work of financing and money lending, had raised loans from certain parties and as per the Assessing Officer (for short, "AO") most of the parties are relatives of the respondent-assessee and they are said to be unsecured loans. It has been claimed by the AO that in most of the cases, though the amount was received by account payee cheque and most of the creditors are assessed to Income Tax Act and had even provided their permanent account number but on the desire of the AO of producing the said parties, it transpired that none of the parties were able to prove the source of amount advanced to the respondent-assessee. It is further claimed by the AO that immediately before the amount was advanced to the respondent-assessee by account payee cheque, cash was deposited in their respective Bank accounts and thereafter the cheque could be cleared and the toral amount is Rs.17,27,250/- in the name of the following creditors:-

(3.) Accordingly, a show cause notice was issued to the respondent-assessee as to why the addition may not be made u/s 68 of the aforesaid amount.