2012 (8) TMI 163 - HC - Income Tax

Addition on account of unexplained loan - Held that - The assessee received the amount and thereafter, repaid the amount, which has been transferred back to the same bank account, thus from the aforesaid transactions it is clear that the amount of Rs. 39,00,000/- remaining outstanding as on 31.03.2006 has been repaid by the assessee in the subsequent F.Y. 2006-07 except by an amount of Rs. 2,15,000/- transferred to current account of the creditor - verifying the assessment records of the creditor it is a registered Company with the ROC & also assessed by ITO, Ward 12(3), New Delhi - As the assessee has been able to prove the identity of the creditor as well the credit worthiness of the creditor and genuineness of the transaction the addition of Rs.39 lakh made by the AO on account of loan taken from H.G. Exim P. Ltd. stands deleted - in favour of assessee.

Summary

Issues:
1. Challenge to ITAT order by Revenue regarding deletion of certain amounts directed by AO.
2. Disputed unsecured loan amount of Rs. 41,50,000/- taken by assessee.
3. Tribunal's findings on the addition of Rs. 39,00,000/- and genuineness of transactions with M/s H.G. Exim P. Ltd.
4. Analysis of the Tribunal's reasoning and dismissal of the appeal.

Detailed Analysis:
1. The Revenue challenged the ITAT's decision upholding the deletion of amounts directed by the AO in the assessment orders. The dispute arose from the AO's addition of Rs. 39,00,000/- to the assessee's income for allegedly unexplained loans taken. The CIT (A) confirmed the addition, but the Tribunal, after reviewing various materials like bank statements and affidavits, found the additions unjustified due to repayment details provided by the assessee.

2. The assessee's unsecured loan of Rs. 41,50,000/- was a point of contention. The AO added Rs. 39,00,000/- to the income, which the Tribunal later deemed unnecessary based on the detailed repayment records presented by the assessee. The Tribunal's analysis of ledger accounts and bank statements revealed a clear picture of repayment transactions, leading to the deletion of the addition.

3. The Tribunal extensively examined the transactions with M/s H.G. Exim P. Ltd. to establish the genuineness of the loan and repayment. Detailed ledger accounts and bank statements were scrutinized, showing a systematic repayment process by the assessee. The Tribunal found no evidence of the transactions being bogus and highlighted the creditor's creditworthiness and genuineness, leading to the deletion of the added amount.

4. Upon reviewing the Tribunal's order, the High Court found no legal errors or unreasonableness in the factual analysis conducted. Consequently, the Court dismissed the Revenue's appeal, stating that no substantial question of law merited consideration. The Tribunal's thorough examination of the evidence and its reasoned decision led to the affirmation of the deletion of the disputed amount, emphasizing the importance of factual analysis in such cases.