| The Tax Publishers2021 TaxPub(DT) 3338 (Mum-Trib) INCOME TAX ACT, 1961
Section 68
Loans were received through banking channels and repaid through banking channels. Assessee has deducted TDS from interest paid on such loans and interest expenditure was allowed as deduction by AO. Also, assessee furnished bank statements of loan creditors as well as of assessee, to prove that transactions were routed through banking channels-both receipts and payments. No further enquiries were made by AO to disprove the evidences. Therefore, addition made under section 68 merely on the basis of information emanated from Investigation Wing could not be sustained.
|
Income from undisclosed sources - Addition under section 68 - Receipt of unsecured loans - Assessee proved identity and creditworthiness of creditors and genuineness of loan transactions
AO based on information emanated from Investigation Wing treated loan amount received by assessee as unexplained credit and thus made addition under section 68. Held: Loans were received through banking channels and repaid through banking channels. Assessee has deducted TDS from interest paid on such loans and interest expenditure was allowed as deduction by AO. Also, assessee furnished bank statements of loan creditors as well as of assessee, to prove that transactions were routed through banking channel-both receipts and payments. Assessee also furnished copies of income-tax returns, balance sheets, financials of the lenders as well as of assessee. Assessee also furnished confirmation letters from lenders stating that they had lent money to assessee. All these evidences went to show that the assessee had discharged its primary onus of proving identity and creditworthiness of the creditors and genuineness of loan transactions, AO had not controverted evidences furnished by assessee. No further enquiries were made by AO to disprove the evidences. Therefore, addition made under section 68 without any enquiry was liable to be deleted.
Relied:CIT v. Orissa Corporation (1986) 159 ITR 78 (SC) : 1986 TaxPub(DT) 1425 (SC), CIT v. Divine Leasing & Finance Ltd. [(2008) 299 ITR 268 (Delhi) : 2008 TaxPub(DT) 400 (Del-HC)], CIT v. Orchid Industries Pvt. Ltd. [ITA No.1433 of 2014] (Bom-HC) : 2017 TaxPub(DT) 1911 (Bom-HC), MOD Creations Pvt. Ltd., v. ITO [(2012) 354 ITR 282 (Del) : 2012 TaxPub(DT) 3314 (Del-HC)], ACIT v. Ramesh Ramswarupdas Jindal in ITA.No. 3091 to 3096/Mum/2017 dated 15-11-2017 : 2018 TaxPub(DT) 0399 (Mum-Trib), Dy. CIT v. Bairaga Builders Pvt. Ltd., reported in [2017] 51 CCH 107 in ITA.No. 4691 and 4692/Mum/2015 dated 14-9-2017, Shree Laxmi Estate Pvt ltd., v. ITO in ITA.No. 5954/Mum/2016 and M/s. Shree Laxmi Developers v. ITO in ITA.No. 2562/Mum/2017 dated 29-12-2017 and Shree Laxmi Developers v. Jt. CIT ITA.No. 6090/Mum/2017 dated 7-3-2018.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
IN THE ITAT, MUMBAI BENCH
 SUBSCRIBE FOR FULL CONTENT
|