Bogus unsecured loan allegation rejected after failure to justify creditworthiness and disregard of documentary proof

Addition under challenge concerns classification of an unsecured loan as bogus where the assessee failed to discharge the onus on identity of the creditor and genuineness of the transaction; the assessing officer treated the receipt as bogus despite the assessee filing documentary evidence and without giving cogent reasons. The appellate authority did not identify specific transactional defects and acknowledged the loan related to an earlier assessment year, with the creditor being a registered company; consequently the creditworthiness issue could not be reexamined for the impugned year and the addition was deleted.

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Issues: Whether the addition of Rs. 2,50,00,000/- made by the Assessing Officer in AY 2012-13 as a bogus unsecured loan (treated under section 68) is sustainable where the assessee produced documentary evidence showing the loan originated in AY 2002-03 and was merely carried forward in the impugned year.

Analysis: The Tribunal examined the documentary record placed before the authorities, including bank statements, confirmations from the creditor, audited financial statements and written submissions filed under section 142(1). The Assessing Officer treated the receipt as a bogus accommodation entry and recorded addition without addressing the documentary evidence demonstrating the loan was taken on 30/03/2002 (A.Y. 2002-03) and was shown as an outstanding unsecured loan in the balance sheet for the impugned year. The first appellate authority sustained the addition citing discrepancies in cheque numbers and reliance on precedents regarding onus, but did not identify any specific defect in the loan transaction nor cogent reasons to treat the earlier-accepted loan as a fresh receipt in the impugned year. The Tribunal noted that the creditor was a registered company and that the question of creditworthiness and genuineness, having been accepted for earlier years, could not be re-decided for the impugned year absent fresh material. The Tribunal further considered the assessees' compliance and corrections supplied to the AO and found no material placed by the revenue to show a fresh loan in the impugned year.

Conclusion: The addition of Rs. 2,50,00,000/- is deleted and the appeal is allowed in favour of the assessee.

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