2024 (2) TMI 1604 - HC - Income Tax

Deletion of addition under Section 68 upheld; no substantial question of law found on cash and loan records

The HC upheld the ITAT's deletion of an addition under section 68, finding no substantial question of law. The court agreed that the AO failed to ... Addition u/s 68 - assessee had indulged in accommodation entry in the guise of unsecured loan with a view to plough back its unaccounted money without paying legitimate tax on it - ITAT deleted addition - HELD THAT:- Tribunal after reappreciating the factual position found that the Assessing Officer has not indicated any discrepancy in any of the details furnished by the assessee, such as, financial statements, bank account statements, the PAN number and income tax details. Further, the learned Tribunal noted that the CIT(A) has also examined each of the cash creditors in detail including the cases where advance of fund were made for the assessee in the preceding year. Further, it has been noted that interests have been paid through banking channels and taxes have been deducted at source. Therefore, Tribunal concluded on facts that the AO failed to bring any adverse material against the assessee and the loans borrowed by them. Furthermore, most of the unsecured loans have been repaid during the subsequent period. No substantial question of law. This appeal under Section 260A of the Income Tax Act, 1961 challenges the Tribunal's order in I.T.A. No. 44/Kol/2021 (AY 2013-14), raising whether unsecured loans of Rs. 4,99,50,000/- and interest of Rs. 52,14,990/- were accommodation entries. The Tribunal, after re-appreciation of evidence, recorded that 'the Assessing Officer has not indicated any discrepancy in any of the details furnished by the assessee, such as, financial statements, bank account statements, the PAN number and income tax details.' The Tribunal noted that CIT(A) examined cash creditors, advances from preceding years, repayments in subsequent periods, interest paid through banking channels, and taxes deducted at source. On these factual findings the Tribunal concluded that the Assessing Officer 'failed to bring any adverse material against the assessee and the loans borrowed by them.' Consequently, 'there is no question of law, much less substantial question of law, arising for consideration in this appeal.' The appeal and related stay petition were dismissed.