2013 (12) TMI 1705 - AT - Income Tax

Summary

Issues involved:
1. Deletion of addition under section 2(22)(e) as 'debt' not 'loan/advance'
2. Deletion of addition of unexplained unsecured loans u/s 2(22)(e)

Deletion of addition under section 2(22)(e) as 'debt' not 'loan/advance':
The Revenue appealed against the CIT(A)'s order deleting the addition of Rs. 18,00,000 under section 2(22)(e) treating it as a 'debt' not a 'loan/advance'. The Revenue argued that the assessee had availed loans from a company in which he had substantial interest. However, the CIT(A) allowed the benefit to the assessee based on the nature of the transactions. The Tribunal found that the transactions were in the nature of ordinary business short-term finance entries, not supported by a loan agreement. The Tribunal agreed with the CIT(A) that the entries could be considered as a 'debt' but not a 'loan/advance' as per section 2(22)(e). The Tribunal upheld the CIT(A)'s decision based on the evidence presented.

Deletion of addition of unexplained unsecured loans u/s 2(22)(e):
During assessment, it was found that the assessee had taken loans from various parties, including Rs. 4 lakhs from Shree Ganesh Ispat Industries. The Assessing Officer added this amount to the income as confirmation and PAN details were not provided. The CIT(A) accepted the explanation that the loan was temporary and deleted the addition. The Tribunal upheld the CIT(A)'s decision as the financing entry was supported by bank records and the account details of the lending party. The confirmation and PAN details were later submitted, leading to the acceptance of the loan as genuine. The Tribunal dismissed the Revenue's appeal based on the evidence presented and the CIT(A)'s decision.

*Order pronounced on 23.12.2013.*