TaxTMI 
TaxTMI 
2021 (5) TMI 303
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....o as the ld AO] under section [u/s] 143(3) of the Income Tax Act, 1961 [hereinafter referred to as the 'Act'] dated 14.3.2016 for the Assessment Year 2013-14. 2. The only issue to be decided in this appeal is as to whether the ld CITA was justified in deleting the addition of Rs. 2,86,00,000/- made on account of unsecured loans u/s 68 of the Act in the facts and circumstances of the case. The interconnected issue involved therein is as to whether the ld CITA was justified in directing the ld AO to allow interest paid on such unsecured loans in the sum of Rs. 2,80,828/- in the facts and circumstances of the case. 3. We have heard the rival submissions and perused the materials available on record. We find that the assessee is a part....
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....ld AO observed in his order that information was received from office of DGIT (Inv.) Mumbai vide letter dated 7.7.2014 wherein it was informed that Shri Pravin Kumar Jain was searched by the Investigation wing , Mumbai and during the course of search operation, it was found that Shri Pravin Kumar Jain was an entry operator engaged into the practice of providing bogus accommodation entries and that the assessee had received bogus loans from parties controlled by Shri Pravin Kumar Jain. Thereafter, the ld AO issued notices u/s 133(6) of the Act to the aforesaid parties to verify the identity and creditworthiness of the loan creditors and genuineness of the transactions. These notices were sent to the addresses (including new addresses) pro....
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....spective parties also. Confirmations from all the parties together with their income tax return acknowledgements and bank statements were submitted vide letter dated 21.1.2016. We find that the assessee also furnished affidavits from all the parties denying the declaration given by them to the income tax department. We find that the ld AO in para 6.29 of his order had stated that assessee had filed affidavit -cum-declarations given by Mr Deepak Dinesh Laddha, director of M/s Pragati Gems Pvt Ltd ; Mr Praveen Kumar H Jain, Director of M/s Olive Overseas Pvt Ltd , M/s Sumukh Commercial Pvt. Ltd and M/s Nakshatra Business Pvt Ltd ; Mr Jitendra Mahaveer Tater, Director of M/s Duke Business Pvt Ltd and M/s Casper Enterprise Pvt Ltd and Mr Abhina....
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....d. AO observed in para 6.7. of his assessment order that mere filing of annual accounts, ITR acknowledgements, confirmations and bank statements / affidavits does not actually prove the identity, creditworthiness and genuineness. Thereafter we find that the ld AO observed that by these documents, only the identity and creditworthiness of the lenders are proved but the genuineness of the transactions had not been proved. But finally the ld AO in para 6.38 of his order observed that the assessee had not proved the creditworthiness of the lenders and genuineness of the transactions and accordingly proceeded to treat the loans received from the aforesaid 7 parties as unexplained cash credit u/s 68 of the Act in the sum of Rs. 2,86,00,000/- . Si....
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.... placing reliance on various decisions, we find that the ld CITA had deleted the addition made u/s 68 of the Act in the sum of Rs. 2,86,00,000/- towards unsecured loans and correspondingly allowed deduction for interest on such unsecured loans in the sum of Rs. 2,80,828/-. 5. At the outset, we find that the assessee had borrowed loans from 7 parties as detailed above during the Asst Year 2013-14. Out of these borrowings, we find that the assessee had duly repaid the loans within the Asst Year 2013-14 in respect of following parties :- 30.8.2012 - Repayment to Nakshatra Business Pvt Ltd - Rs. 40 lacs 30.8.2012 - Repayment to Olive Overseas Pvt Ltd - Rs. 45 lacs 30.8.2012 - Repayment to Casper Enterprises Pvt Ltd - Rs. 10....
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....s furnished the complete details about the loan creditors together with their latest addresses as available with it and affidavits from directors duly notarised including details of loan repayments made to those companies and confirmations from them for the loans advanced to the assessee, the onus cast on the assessee u/s 68 of the Act stands duly discharged and no addition could be made in its hands merely on because the lenders fail to appear before the ld AO or the assessee failing to produce them before the ld AO. Reliance in this regard is placed on the decision of Hon'ble Jurisdictional High Court in the case of CIT vs Orchid Industries P Ltd reported in 397 ITR 136 (Bom). We further hold that no addition could be made on mere presump....