2018 (12) TMI 1129

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....cured loan and Rs. 4,22,531/- being the interest related to the aforesaid amount of loan of Rs. 40,00,000/-. 3. Brief facts of the case are that the assessee filed its return electronically on 20.09.2014 declaring total income of Rs. 92,82,290/-. Later the case was selected for scrutiny. The AO noted that the assessee has taken unsecured loan to the tune of Rs. 44,22,531/- from M/s. Pasupati Trade Links Pvt. Ltd. In order to find out the veracity of the loan, the AO issued notice u/s. 133(6) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") which the AO notes to have returned un-served. However the AO acknowledged that the assessee produced (i) loan confirmation, (ii) bank statement, (iii) copy of ITR Acknowledgment, (iv....

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....tice that the AO has made double addition of the interest element. On one hand he has made the entire addition of Rs. 44,22,531/- under the head bogus unsecured loan wherein the loan amount of Rs. 40,00,000/- + Rs. 4,22,531/- was added and thereafter separately disallowed an amount of Rs. 4,22,531/- u/s. 37(1) of the Act. According to Ld. AR, the double deduction itself exposes the prejudice and pre-determined mind of the AO that the loan is an accommodation entry. It was brought to our notice that the assessee has already repaid the loan amount and for that he drew our attention to page 31 of the paper book which is the letter written by the ITO, Ward-5(2), Kolkata who is the AO of M/s. Pasupati Tradelink Pvt. Ltd. (the lender company in t....

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....hich is the bank statement of the lender/creditor M/s. Pasupati Tradelink Pvt. Ltd. from which we note that M/s. Pasupati Tradelink Pvt. Ltd. received Rs. 40 lakhs from M/s. Godavari Exim Pvt. Ltd. on 05.04.2013. The Ld. AR drew our attention to the audited statement of account of the loan creditor which is placed at pages 14 to 29 of the paper book and the ITR for AY 2014-15 of the loan creditor is found placed at page 30 of the paper book and thus he pleaded that the assessee has discharged the burden casted upon him to prove the identity, creditworthiness and genuineness of the unsecured loan taken by the assessee from lender company M/s. Pasupati Tradelink Pvt. Ltd. So he pleaded that addition was unjustified and want us to delete the a....

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....as been able to discharge the onus casted upon it to prove the identity, creditworthiness and genuineness of the loan creditor. For taking such a view we rely on the order of the Hon'ble Calcutta High Court in S. K. Bothra & Sons HUF Vs. ITO 347 ITR 347 (Cal). Further, we note that the Hon'ble Calcutta High Court in Crystal Network (P) Ltd. Vs. CIT 353 ITR 171 (Cal) has observed that the creditors cannot be disbelieved merely because they did not respond to summons when all other documents to substantiate the loan transaction has been filed before the assessing authority. The Hon'ble Calcutta High Court in CIT Vs. Dataware (P) Ltd. ITA No. 263 of 2011 dated 21.09.2011 has held that in case if the AO has doubt regarding the creditworthiness ....