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TMI Blog2023 (1) TMI 887X X X X Extracts X X X X X X X X Extracts X X X X ..... nsecured loans and allow this ground of appeal in favour of the assessee. A.O has disallowed the interest on unsecured loans - Since we have directed the A.O to delete the addition of unsecured loans in the above Para-7, therefore the interest on the unsecured loans are to be allowed. Accordingly, we direct the A.O to delete the addition and allow the interest claim of the assessee on the unsecured loan creditors. Appeal filed by the assessee is allowed. - ITA No. 2567/Mum/2022 - - - Dated:- 9-1-2023 - SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER And SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER For the Appellant : Mr.Vimal Punmiya.AR For the Respondent : Mr.Tejinder Pal Singh Anand.DR ORDER PER PAVAN KUMAR GADALE JM: The assessee has filed the appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi / CIT(A) passed u/s 143(3) r.w.s 147 and U/sec 250of the Act. The assessee has raised the following grounds of appeal: 1. NOT GIVING PROPER OPPORTUNITY: 1.1. The Commissioner of Income Tax (Appeals) National Faceless Appeal Centre [the CIT (A)] erred passing order under section 250 of the Income tax Act, 1961 ('the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank statements, confirmations along P.A. No. of the lenders to prove genuineness of the loans received by it, during the assessment and appellate proceedings; and (iii) the loans were repaid together with the interest thereon during the subsequent years. 3.3. It is submitted that in the facts and the circumstances of the case, and in law, no such addition was called for. 4. DISALLOWANCE OF INTEREST EXPENSES: 4.1. The ld. CIT (A) erred in confirming the action of the A.O. whereby the A.O. had disallowed the deduction of Rs. 6,39,452/-, claimed on account of interest paid to the parties from whom loans of Rs. 2,60,00,000/- were taken. 4.2. While doing so, the CIT (A) failed to appreciate that: (i) the interest on loans was paid by the Appellant in its regular course of business; and (ii) the interest was paid after deducting taxes at source at the prevailing rates. 4.3. It is submitted that in the facts and the circumstances of the case, and in law, no such disallowance was called for. 5. LIBERTY The Appellant craves leave to add, alter, delete or modify all or any the above ground at the time of hearing. 2. The brief facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paties along with the copies of their bank statements for given loans by them, and receipt of the said loan with interest by them. Thus from the said submissions the identity and the creditworthiness of the said companies are proved. iii. To prove the genuineness of the transactions, it is evident from the bank statement that there is no cash deposit by the said parties when they advanced loan to our client. Further, when the said loan was repaid, there is no cash deposit by our client. iv. From the above submission, it is duly proved the genuineness of the said transactions. However, if your goodself has any materials in your possession which can prove that the said loan transaction is not genuine one, the same may be provided to our client. v. Further, no addition can be made on a general statement of any person, as our client has submitted the loan-confirmation, copy of ITR and copies of bank statements of the persons from whom he has taken the loans and has thus discharged the onus cast upon him. In his submission, assessee stated that our client has submitted 4. Whereas the AO is of the opinion that the assessee has not discharged the burden of proof an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ils before the lower authorities. We find that before the Assessing Officer, the assessee has submitted information in respect of unsecured loan creditors and the A.O. has issued notice u/s 133(6) of the Act. On perusal of the assessment order, the assessee has submitted the documentary evidences but the A.O has over looked the vital documents/details in respect of the sources filed by the assessee. The assessee has submitted the written submissions before the CIT(A) on 11.05.2022 and the confirmation of loan creditors, PAN, Bank account details and the Income Tax returns. We find that the assessee has to satisfy the 3 ingredients with respect to identity, creditworthiness and genuineness of the transactions and the unsecured loans were obtained and repaid in the regular course of business through proper banking channels and the Interest have been paid regularly after deducting TDS and the asssessee has also filed quarterly TDS returns and also the Copy of re-traction statement filed by Shri Praveen Kumar Jain placed at page354 of the paper book. The CIT(A) has discussed on the provisions of the Act but has confirmed the action of the A.O and primafacie the assessee has discharged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itworthiness and genuineness of the lender company was proved in the assessment proceedings. Further the assessee has submitted the audited financial statements, confirmations, Bank statements, copy of the income tax returns and the repayment details to substantiate the genuineness and credit worthiness of loan creditors, which are placed at page 40 to 312 of paper book. The Ld.AR demonstrated the copy of bank statements reflecting the repayment of unsecured loans in the paper book a which is not disputed by the revenue. Further, the A.O has failed to make further enquiries and relied on the statement recorded, overlooking the factual aspects that the assessee has discharged the initial burden placed by furnishing the details. The information submitted by the assessee satisfied the three ingredients of provisions of Sec. 68 of the Act. Further the A.O. has not allowed the interest on unsecured loans in the F.Y.2011-12, as the loan transactions are not believed and alleged as non genuine and treated as unexplained cash credit U/sec68 of the Act and these unsecured loans were repaid through account payee / banking channels in the current financial year and subsequent year which is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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