- (1.) The revenue has preferred the instant appeal under Section 260A of the Income-tax Act, 1961 (for brevity, 'the Act') against the order dated 8.12.2010 (A-3) passed by the Chandigarh Bench 'B' of the Income Tax Appellate Tribunal (for brevity, 'the Tribunal), dismissing the appeal of the revenue-appellant and upholding the order dated 15.4.2008 (A-2) passed by the Commissioner of Income Tax (Appeals), Ludhiana. The Commissioner has deleted the addition of Rs. 50,51,650/- as income of the assessee-respondent, which was made by the Assessing Officer under Section 68 of the Act while finalising the assessment in respect of the Assessment Year 2000-01, vide order dated 4.3.2003 (A-1). The Assessing Officer has come to the conclusion that the assessee-respondent failed to prove the genuineness of the transactions and creditworthiness of the creditors.
(2.) Brief facts of the case are that the assessee-respondent is a private limited company and during the relevant Assessment Year 2000-01, it was engaged in the business of Investment and Consultancy. On 14.5.2001, the assessee-respondent filed the return declaring its income at Rs. 4,97,180/-. In the return of income the assessee-respondent has shown unsecured loans of Rs. 50,51,650/- (Rs. 72,000/- in the name of Mrs. Pritpal Kaur and Rs. 49,79,650/- in the name of Shri Reetinder Sidhu). It is claimed that since the assessee-respondent did not respond to the notices issued under Sections 143(2)/142(1) of the Act, therefore, the taxable income was assessed at Rs. 55,92,580/- under Section 144 of the Act, which also included an addition of Rs. 50,51,650/- under Section 68 of the Act.
(3.) Challenging the order passed by the Assessing Officer, the assessee-respondent filed an appeal before the CIT (A), Ludhiana. During the course of the appeal the Commissioner permitted the assessee-respondent to lead additional evidence under Rule 46A of the Income Tax Rules, 1962 (for brevity, 'the Rules'). Copies of the additional evidence furnished by the assessee-respondent were also sent to the Assessing Officer for comments and after consideration of the report submitted by him the Commissioner deleted the addition by holding that the assessee-respondent has proved the genuineness of the transactions, identity, capacity and creditworthiness of the creditor, vide order dated 15.4.2008 (A-2).;