The Appellate Tribunal held that the Assessing Officer erred in ...

Income Tax Tribunal Allows Unsecured Loans & Interest Deduction After Assessee Provides Sufficient Evidence.

Case Laws     Income Tax

November 14, 2024

The Appellate Tribunal held that the Assessing Officer erred in making additions u/s 68 for unsecured loans and disallowing interest component. The assessee demonstrated repayment of unsecured loans through bank statements and submitted relevant evidence, including audited financial statements, confirmations from lenders, and bank statements filed u/s 133(6). The Assessing Officer failed to conduct further inquiries and relied solely on a third party's unreliable statement, ignoring the evidence provided by the assessee. The Tribunal concluded that the assessee satisfied the requirements of Section 68 by substantiating the loan transactions, which were repaid through banking channels. Consequently, the Tribunal set aside the orders of the lower authorities and directed the Assessing Officer to delete the additions for unsecured loans and disallowance of interest, deciding in favor of the assessee.

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