Tribunal grants appellant opportunity to establish loan genuineness under Income Tax Act Section 68.

The Tribunal condoned the delay in filing the appeal due to the appellant's explanation of the misplaced original order. Regarding the disallowance of unsecured loans under section 68 of the Income Tax Act, the Tribunal granted the appellant an opportunity to establish the genuineness of the transactions, remanding the issue back to the Assessing Officer for further examination. The Tribunal allowed the appeal for statistical purposes, providing the appellant with a chance to prove the legitimacy of the loans and interest payments.

---

---

Issues:
1. Delay in filing the appeal
2. Disallowance of unsecured loans and interest under section 68 of the Income Tax Act

Analysis:

Issue 1: Delay in filing the appeal
The appellant filed an appeal against the order of the Commissioner of Income Tax (Appeals) after a delay of thirty-one days. The appellant explained that the delay was due to the original appellate order being misplaced and later found. The appellant contended that the delay was unintentional and requested condonation. The Tribunal, after considering the reasons provided, condoned the delay in the interest of justice and admitted the appeal.

Issue 2: Disallowance of unsecured loans and interest under section 68 of the Income Tax Act
The Assessing Officer disallowed unsecured loans shown by the assessee from two individuals as the assessee failed to prove the genuineness, identity, and creditworthiness of the creditors. The Commissioner of Income Tax (Appeals) upheld this disallowance. The appellant argued that all transactions were conducted through banking channels, with loans received and repaid via cheques. The appellant claimed that the loans were used to make payments towards TDS to the government and that the creditors were identifiable. The Departmental Representative supported the lower authorities' decision, stating that the appellant did not provide sufficient explanation to prove the genuineness of the transactions.

The Tribunal noted that the transactions were made through account payee cheques, indicating the identity of the creditors. However, the burden was on the assessee to produce creditors' confirmations and explain the sources of loans. In the interest of justice, the Tribunal granted the assessee one more opportunity to establish the identity, creditworthiness, and genuineness of the transactions. The Tribunal set aside the previous order and remanded the issue back to the Assessing Officer for further examination, with the direction to provide the assessee with a fair hearing.

In conclusion, the appeal of the assessee was allowed for statistical purposes, and the Tribunal provided the assessee with an opportunity to prove the legitimacy of the unsecured loans and interest payments under section 68 of the Income Tax Act.

Order pronounced on 30th October 2015 by the Appellate Tribunal ITAT Chennai.

---