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2023 (8) TMI 288 - AT - Income TaxAddition u/s 68 - unsecured loans received - loan creditor not paid Short Term Capital Gain on sale of land - whereabouts of loan creditor Smt. Hansaben M. Patel is not known and she is treated as an absconded assessee, thus A.O. treating the above loan from her as not genuine - CIT(A) deleted the addition - HELD THAT - As sale of the lands and execution of sale deeds by Smt. Hansaben M. Patel was not doubted by the Revenue, but as her whereabouts are not known, thereby the loan transactions to various parties is doubted by the Revenue. Since the respondent-assessees herein provided Copies of the Ledger account, confirmation, Bank Details, PAN and Income Tax Return of Smt. Hansaben M. Patel and contra entry and Bank Statements of Smt. Hansaben M. Patel, etc. After considering the above details we are of the considered view the assessee has discharged its initial onus cast upon him u/s. 68 of the Act and the Revenue failed to disprove the above transaction as bogus. It is the case of the assessee that the unsecured loan availed was repaid in the next financial year to the creditor namely Smt. Hansaben M. Patel through cheque payments and the bank statement also filed before the Lower Authorities. Therefore we are of the considered opinion, the provisions of section 68 does not attract in the above transaction and thereby we uphold the order passed by CIT(A) deleting the addition made u/s. 68 of the unsecured loans availed from Smt. Hansaben M. Patel. Decided against revenue.
Issues Involved:
1. Legitimacy of unsecured loans received by various assessees. 2. Application of Section 68 of the Income Tax Act, 1961. 3. Assessment of the identity, genuineness, and creditworthiness of the creditors. Summary: Issue 1: Legitimacy of Unsecured Loans Received by Various Assessees These eight appeals by the Revenue challenge the deletion of additions made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, 1961, regarding unsecured loans received by different assessees from Smt. Hansaben M. Patel, Shri Kamal Gohil, and Shri Mukesh Jayantilal Shah. The loans were repaid in the next financial year, leading the Commissioner of Income Tax (Appeals) [CIT(A)] to delete the additions. Issue 2: Application of Section 68 of the Income Tax Act, 1961The AO added the unsecured loans to the total income of the assessees under Section 68, citing that the identity, genuineness, and creditworthiness of the creditors were not satisfactorily proven. The AO noted that Smt. Hansaben M. Patel had not filed her Return of Income except for AY 2009-10 and had continuous credit and debit entries in her bank account, suggesting she was an accommodation entry provider. Issue 3: Assessment of the Identity, Genuineness, and Creditworthiness of the CreditorsThe CIT(A) deleted the additions, stating that the loans were obtained through account payee cheques, and the identity of Smt. Hansaben M. Patel was proven through PAN details, IT returns, and bank statements. The CIT(A) also noted that the transactions were genuine and the creditworthiness was established as Smt. Patel sold land worth Rs. 149 crores and was assessed at Rs. 103.02 crores for AY 2009-10. The Tribunal upheld the CIT(A)'s decision, emphasizing that the identity, genuineness, and creditworthiness of the creditors were satisfactorily proven by the assessees. The Tribunal referenced previous decisions where similar unsecured loans were deemed genuine, and the AO had not provided contrary evidence. In cases involving loans from Shri Kamal Gohil and Shri Mukesh Jayantilal Shah, the Tribunal found that the identity, genuineness, and creditworthiness were similarly established through documentary evidence, including PAN cards, sale deeds, and bank statements. The Tribunal also noted that the loans were repaid through banking channels, further proving their legitimacy. Consequently, the Tribunal dismissed the Revenue's appeals, confirming that the provisions of Section 68 did not apply to the transactions in question. Conclusion:The appeals filed by the Revenue in ITA Nos. 945/Ahd/2018, 1249/Ahd/2018, 1252/Ahd/2018, 1253/Ahd/2018, 1254/Ahd/2018 (for A.Y. 2009-10), ITA No. 457/Ahd/2020, 477/Ahd/2020, and IT(SS)A No. 54/Ahd/2021 (for A.Y.2010-11) are hereby dismissed.
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