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2020 (10) TMI 651 - AT - Income TaxAddition u/s 68 - Bogus unsecured loan - said creditors/parties were found to be accommodation entry provider/bogus entity as per findings given by the Investigation Wing, Income Tax Department, Mumbai - CIT-A deleted the addition - HELD THAT - Assessee has furnished documentary evidence including confirmation letters, bank statements, financial statements of the entities from whom, the assessee had obtained loans in question etc. Hence, in our considered view, the assessee has discharged his onus of establishing the identity and creditworthiness of the entities from whom, it had obtained the loans in question. The assessee has also established the genuineness of the transaction by adducing necessary evidence. On the other hand the AO has not brought any material on record to rebut the contention of the assessee. Findings of the Ld. CIT (A) are based on the established principles of law and in accordance with the decision of the coordinate Bench rendered in the case of DCIT vs. M/s Manba Finance Ltd. 2019 (2) TMI 101 - ITAT MUMBAI - Decided in favour of assessee.
Issues Involved:
1. Legitimacy of the unsecured loans amounting to ?2,07,38,443/- received by the assessee. 2. Application of Section 68 and Section 69A of the Income Tax Act, 1961. 3. Validity of the addition made by the Assessing Officer (AO) based on statements made under Section 132(4). 4. Whether the assessee discharged its onus of proving the genuineness of the loan transactions. Detailed Analysis: Legitimacy of the Unsecured Loans: The revenue challenged the deletion of the addition of ?2,07,38,443/- made by the AO, arguing that the loans were bogus and provided as accommodation entries by entities controlled by Shri Bipul Vidur Bhatt. The AO based this on documents seized during a search action, which indicated that these entities provided accommodation entries against cash receipts. Application of Section 68 and Section 69A: The AO invoked Section 69A, arguing that the absence of entries in the assessee's books regarding the transactions indicated that the loans were unexplained. However, the CIT (A) and the Tribunal found that the assessee had provided sufficient documentation, including loan confirmations, bank statements, and evidence of repayment with interest and TDS deductions, to establish the transactions' legitimacy. Validity of the Addition Based on Statements Under Section 132(4): The AO relied heavily on the statement of Shri Bipul Vidur Bhatt, who initially admitted that his companies provided accommodation entries. However, the Tribunal noted that Bhatt had retracted his statement via an affidavit. It emphasized that an addition cannot be made solely based on a retracted statement without corroborative evidence. Onus of Proving Genuineness of Loan Transactions: The Tribunal upheld the CIT (A)'s decision, stating that the assessee had discharged its onus by providing comprehensive documentation, including confirmations from the creditors, their income tax returns, audited accounts, and bank statements. The Tribunal also referenced several case laws supporting the principle that the onus shifts to the revenue once the assessee provides prima facie evidence of the transactions' genuineness. Tribunal's Conclusion: The Tribunal found that the AO did not bring any substantive evidence to counter the documentation provided by the assessee. It noted that the CIT (A) had rightly pointed out the lack of any evidence showing that cash was introduced before advancing the loans. The Tribunal also referenced past decisions, including those involving similar issues with group concerns of the assessee, to support its conclusion. The Tribunal concluded that the CIT (A)'s order was well-reasoned and in line with established legal principles. It dismissed the revenue's appeal, directing the AO to delete the addition made on account of alleged bogus unsecured loans. Final Judgment: The appeal filed by the revenue for the assessment year 2012-2013 was dismissed. The Tribunal directed the AO to delete the addition of ?2,07,38,443/- made on account of alleged bogus unsecured loans. The order was pronounced on 10th September 2020.
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