2024 (8) TMI 420 - AT - Income Tax

Addition of unproved loans - Disallowance of interest to bank - assessee had taken secured loans from different banks - assessee argued that 3 loans are from earlier years and was only the balance is carried over to this year - HELD THAT - As directed to the ld. AO that the additions are liable to be deleted on the ground that the loans are brought forwarded from earlier years, not related to this impugned assessment year. In the case of Mrs. Binita Doshi, the assessee received the amount of Rs. 1 crore and the legal case was going on u/s 138 of the N.I. Act, 1881 - The assessee has shifted the onus by submitting evidence in his favour. But the matter is unverified before the revenue authorities. In our considered view we remit the matter back to the file of the ld. AO to verify the loan creditor after giving the proper opportunity to the assessee. Related to other loans, which are taken during this year, the assessee submitted the confirmations, PAN, entry in bank account and the identity of loan creditors - We consider the submission of the assessee and remand the matter back to the file of the ld.AO for further verification of loan creditors. DR had not made any strong objection against the setting aside matter to the ld. AO. Accordingly, the impugned appeal order is set aside. The matter is remanded back to the file of the ld. AO. Interest of the bank , the issue is also unverified before any of the revenue authorities below. So, the interest amount from the bank to receive amount of Rs. 56,08,404/- is also remitted back to the file of Ld.AO. Needless to say, the assessee should get a reasonable opportunity of being heard in set aside proceedings.

Summary

Issues:
1. Addition of unproved loans
2. Disallowance of interest to bank
3. Leave to add, alter, amend grounds of appeal

Analysis:

Issue 1: Addition of unproved loans
The appellant challenged the addition of Rs. 7,93,74,917 as unproved loans. The appellant contended that the loans were genuine, supported by capable parties, and involved real transactions. The appellant sought deletion of the addition. The Tribunal noted that some loans were carried forward from previous years, and thus, directed the deletion of certain amounts. However, for loans taken during the impugned year, the Tribunal remanded the matter back to the Assessing Officer for further verification. The Tribunal emphasized the need for proper verification of loan creditors and allowed the appeal partly for statistical purposes.

Issue 2: Disallowance of interest to bank
The appellant contested the disallowance of interest to UCO Bank amounting to Rs. 56,06,404, arguing that it was paid on a secured loan utilized for business purposes. The Tribunal observed that the issue remained unverified by the lower authorities. Consequently, the Tribunal remitted the matter back to the Assessing Officer for proper examination. The appellant was granted a reasonable opportunity to present their case during the reassessment.

Issue 3: Leave to add, alter, amend grounds of appeal
The appellant sought leave to add, alter, or amend the grounds of appeal if required, which was a general request and not specifically contested in the judgment.

In conclusion, the Tribunal partially allowed the appeal concerning the addition of unproved loans and the disallowance of interest to the bank. The matters were remanded back to the Assessing Officer for thorough verification, emphasizing the importance of providing the appellant with a fair opportunity to present their case. The judgment was pronounced on July 9, 2024.