Case: Commissioner of Income Tax-3 Vs. Tania Investments Private Limited

In the instant case, the Assessing Officer has disallowed the loss on the ground that there was no material. Before the CIT(A) remand report was called from the Assessing Officer. The Assessing officer on remand in his report admitted that the identity of the parties and also that there was corresponding entries in the books of account. The CIT (A) consequently allowed the appeal. Revenue came in appeal before the ITAT which was dismissed and consequently, the present appeal.

Court's reasoning:
The learned Tribunal in its order, in order to answer the said contention, observed as under."The learned Assessing Officer having any doubt with regard to capacity of the party to advance loan, no one prevented him to verify the capacity of the creditors."5.In our opinion, the books of accounts were available to the Assessing Officer. The books of accounts itself would indicate the capacity of the party to advance loan. There was no further need on the part of the assessee to prove the capacity of the creditors.6.In the instant case, it is not possible to hold that the reasoning adopted by the Tribunal is devoid of merit and/or unsustainable.