2022 (10) TMI 1185 - AT - Income Tax

Addition u/s 68 - bogus/ ungenuine loans received - CIT(A) held that the bank statements of the loan parties were not furnished by the appellant and at the same time held that, on analysis of the bank accounts credit in the lenders account for more than the amount received by the Assessee - HELD THAT - The total credit in the lenders account for more than the amount received by the Assessee cannot be a reason to construe the loan as bogus/ ungenuine. Having gone through the entire evidences submitted by the Assessee as mentioned above at the beginning of this para, in the absence of any contra findings brought by the Revenue, we hold that no addition on account of the loans received by the Assessee is called for. Decided in favour of assessee.

Summary

Issues:
1. Appeal against NFAC order
2. Addition made on account of loan parties
3. Sufficiency of sources and genuineness of income

Analysis:
The appeal was filed against the NFAC order by the assessee. The additions were made concerning loan parties, specifically M/s. A.K. Agarwal and Sons and M/s. S.C. Agarwal and Sons. The assessee provided detailed documentation such as PAN, amount, mobile number, complete address, confirmation, ITR, computation of income, bank statement, and replies to notices to establish the identity, genuineness, and creditworthiness of the loans received. Additionally, the source of cash received as repayments from various individuals was explained, along with the payment of interest and deduction of TDS. The primary basis for the addition was the low returned income, disregarding the sufficiency of sources and genuineness. The CIT(A) noted the absence of bank statements of the loan parties but also observed discrepancies in the bank accounts of S.C. Agarwal and Sons. Despite the total credit in the lender's account exceeding the amount received by the assessee, it was concluded that no addition on account of the loans received was warranted due to the lack of contrary findings by the Revenue.

The tribunal's decision was pronounced on 18/10/2022, where it was held that no addition on account of the loans received by the assessee was justified based on the evidence submitted and the absence of contradictory findings by the Revenue.