2018 (12) TMI 1616 - AT - Income Tax

Addition u/s 68 - unsecured loans taken during the year - disallowing interest paid during the year on unsecured loans - HELD THAT - As decided in assessee s own case 2018 (11) TMI 133 - ITAT MUMBAI relying on Golden Remedies P. Ltd. (2007 (10) TMI 433 - ITAT DELHI) held that where the loans were accepted through account payee cheques and had been repaid through account payee cheques, which were also confirmed by the parties and the assessee has also produced bank account and PAN of each party to support his case, the AO is not justified in treating the transactions as non genuine and no addition can be made under Section 68 of the Act. Thus we are inclined to set aside the order of the CIT(A) by holding that the assessee has duly discharged the its onus by filing the necessary evidences before the authorities below and therefore addition by the AO u/s 68 of the Act is ordered to be deleted. - Decided in favour of assessee.

Summary

Issues:
Challenging disallowance of interest on unsecured loans added to income under section 68 of the Act during AY 2010-11.

Analysis:
The appellant's appeal contested the order of the Ld. CIT(A) confirming the AO's disallowance of interest on unsecured loans added to the appellant's income under section 68 of the Act during AY 2010-11. The Ld. AR argued that this issue had been previously decided in the appellant's favor by the Hon'ble ITAT in a separate case. The Ld. DR concurred with the Ld. AR's assertion that the issue was indeed in favor of the assessee.

Upon reviewing the arguments and evidence presented by both parties, the Tribunal noted that the same issue had been adjudicated by the Hon'ble ITAT in the appellant's own case for AY 2010-11, 2012-13, and 2013-14. The Tribunal referenced the detailed findings of the Hon'ble ITAT in the previous case, highlighting that the primary onus on the assessee was discharged by providing necessary documentation, and the Revenue authorities failed to conduct adequate investigations. The Tribunal emphasized that the Revenue did not dispute the interest payments made by the assessee, and the genuineness of the transactions was unjustly doubted. Citing relevant case laws, the Tribunal concluded that the appellant had sufficiently proven the legitimacy of the loans, leading to the deletion of the addition under section 68 of the Act.

In light of the previous decisions by the Hon'ble ITAT and to maintain judicial consistency, the Tribunal applied the same findings from the earlier case to the present situation. Consequently, the appeal filed by the assessee was allowed with no order as to costs. The judgment was pronounced in open court on 27th December 2018.