|
The Tax Publishers2020 TaxPub(DT) 3631 (Del-Trib) INCOME TAX ACT, 1961
Section 68
Where assessee took loan from certain company and AO treated same as unexplained on allegation that lender company was only a paper company providing accommodation entries to group concerns of assessee, considering fact that creditworthiness of lender company was accepted in case of group concern of assessee and that loan was repaid by assessee, there was no merit in findings of AO.
|
Income from undisclosed sources - Addition under section 68 - Creditworthiness of lender doubted by AO -
Assessee-company was engaged in business of sale of flats. Pursuant to a search action on assessee's group concern, it was found that assessee took loan from certain private limited company. AO treated it as unexplained cash credit on allegation that assessee failed to prove the creditworthiness and made addition under section 68. Held: Transactions with lender were questioned by AO on grounds that assessee failed to establish creditworthiness. Since creditworthiness of lender company was accepted in case of group concern of assessee, there was no merit in aforesaid finding of lower authorities. Perusal of confirmation of ledger account of lender implied that loan was repaid much earlier than date of search. Assessee successfully discharged its onus cast upon it by provisions of section 68. Thus, there was no merit in allegation of lower authorities that lender company was only a paper company providing accommodation entries to group concerns of assessee.
Relied:Nimbus (India) Ltd. v. Dy. CIT 2020 TaxPub(DT) 1267 (Del-Trib).
REFERRED : Pr. CIT v. NDR Promoters Pvt. Ltd. 2019 TaxPub(DT) 886 (Del-HC) and Pr. CIT (Central) v. NRA Iron & Steel Pvt. Ltd. 2019 TaxPub(DT) 1628 (SC).
FAVOUR : In assessee's favour.
A.Y. : 2013-14 & 2014-15
SUBSCRIBE FOR FULL CONTENT |