Section 68 Addition Fails Where AO Makes No Inquiry: Unsecured Loans Accepted

Surender Singh Sangwan Vs ITO (ITAT Delhi) Assessee received unsecured loans aggregating to Rs.1.05 crore from five individuals and duly furnished confirmations, affidavits, PAN, Aadhaar, bank statements and ITR details wherever applicable. All loans were received through banking channels. AO, however, made addition u/s 68 solely on the ground of alleged lack of creditworthiness of lenders, without issuing summons u/s 131 or notices u/s 133(6) and without conducting any independent inquiry. CIT(A) confirmed the addition. ITAT deleted the addition holding that Assessee had discharged the primar...