2019 (6) TMI 1690 - AT - Income Tax

Addition u/s 68 - unsecured loan from persons/entities engaged in providing accommodation entry - HELD THAT - On perusal of the order of the Coordinate Bench 2019 (3) TMI 1835 - ITAT MUMBAI entire transactions were routed through the banking channels and thus the assessee has discharged the primary onus of proving the identity, creditworthiness and genuineness of the transactions. Another allegation of the AO is that assessee has failed to produce the parties and hence question of providing cross examination does not arise which is without merit as the assessee has discharged its onus by providing all the basic documentary evidences before the AO who just relying on the statement of Shri Pravin Kumar Jain treated the loan transactions as unexplained credit in the books of the assessee. On the issue that these lenders are showing low income or losses in the return of income filed, we observe that in the balance sheets the said loan advanced by the lender were duly reflected and thus there is no income in the particular year has no relevance and there were sufficient sources. Under these circumstances, we, after taking into consideration contentions m, submissions and written submissions of both the parties and after analyzing the various case laws relied upon by the rival parties , are of the view that order passed by the Ld. CIT(A) is well reasoned and there is no reasons to deviate from the findings of the ld CIT(A) and therefore same is being upheld by dismissing the appeal of the revenue

Summary

Issues Involved:
Revenue's appeal against deletion of addition of unsecured loan under section 68 of the Income Tax Act, 1961 for A.Y. 2009-10.

Analysis:

Issue 1: Deletion of Addition of Unsecured Loan
- The appeal was filed by the Revenue against the CIT(A)'s order deleting the addition of ?65,00,000 made by the AO under section 68 of the Income Tax Act, relating to unsecured loans from entities involved in accommodation entries.
- The AO treated the loans as bogus after receiving information from the DGIT (Inv), Mumbai, regarding the assessee's involvement in receiving bogus loan entries.
- The CIT(A) allowed the appeal, stating that the assessee provided adequate documents to prove the genuineness of the loan transactions, resulting in the deletion of the addition.
- The assessee relied on a previous decision where similar issues were decided in their favor, emphasizing the discharge of onus through bank statements, income tax returns, PAN of lenders, and confirmations.
- The Coordinate Bench's order in the previous case highlighted that the assessee had fulfilled the onus by providing necessary evidence, including bank statements, ITRs, confirmations, and PAN numbers of lenders, leading to the dismissal of the Revenue's appeal.
- The Coordinate Bench's decision was followed in the current case due to identical circumstances and lack of new evidence presented by the Revenue, resulting in upholding the CIT(A)'s order and dismissing the Revenue's appeal.

This comprehensive analysis addresses the issues involved in the legal judgment, focusing on the deletion of the addition of unsecured loans under section 68 of the Income Tax Act, 1961 for the relevant assessment year.