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2024 (12) TMI 1211 - AT - Income TaxAddition u/s 68 - unsecured loans from paper companies - HELD THAT - As decided in Ojas Tarmake (P.) Ltd. 2023 (9) TMI 845 - GUJARAT HIGH COURT AO made addition on ground that assessee failed to discharge onus of liability as laid down under section 68, since amount of loan received by assessee was returned to loan party during year itself and all transactions were carried out through banking channels, impugned addition was to be deleted. Also in Ganesh Plantation Ltd. 2021 (12) TMI 206 - GUAJRAT HIGH COURT since no live link/proximate nexus of alleged dubious transactions between searched person and assessee had been brought on record, said addition was to be deleted. Decided against revenue.
Issues:
Appeal against reassessment order under section 143(3) r.w.s. 147 for Assessment Year 2017-18. Disputed unsecured loans from paper companies. Deletion of additions made by the Assessing Officer. Analysis: The appeal was filed by the Revenue against the appellate order dated 15.07.2024 passed by the Commissioner of Income Tax (Appeals)-11, Ahmedabad regarding the reassessment order under section 143(3) r.w.s. 147 for the Assessment Year 2017-18. The case involved unsecured loans received by the assessee from paper companies controlled by an entry operator. The Assessing Officer added the unsecured loans as unexplained income, leading to a demand for tax. However, the CIT(A) deleted the additions after considering evidence of repayment of loans with interest. The CIT(A) observed that the appellant had repaid the loans along with interest after deducting TDS, and the transactions were done through banking channels. The CIT(A) also noted that the loans were repaid before a search/survey action conducted on related entities. The appellate order detailed the repayment of loans and interest, with supporting documents provided by the appellant. The Revenue raised various grounds of appeal, challenging the deletion of additions related to unsecured loans and interest. The Revenue contended that the paper companies did not have the creditworthiness to lend such significant amounts. However, the CIT(A) relied on the appellant's submissions, including ledger accounts, bank statements, and TDS deductions, to support the repayment of loans and interest. The Revenue's arguments were dismissed based on the evidence presented by the appellant and the findings of the CIT(A). The Revenue's grounds of appeal were found to be devoid of merit and were dismissed. In support of the decision, the Tribunal cited judicial precedents, such as the case of PCIT Vs. Ojas Tarmake (P.) Ltd., where unsecured loans received during the assessment year were returned to the loan party through banking channels, leading to the deletion of the addition under section 68. Similarly, in the case of PCIT Vs. Ganesh Plantation Ltd., additions made without a proximate nexus between transactions were deleted. Following these precedents, the Tribunal confirmed the order passed by the CIT(A) and dismissed the appeal filed by the Revenue. The decision was pronounced in open court on 19-12-2024.
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