TaxTMI 
TaxTMI 
2023 (9) TMI 946
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....ssee has taken the following grounds of appeal:- "1. The learned CIT(A) has erred both in law and on facts of the case in confirming the addition of Rs. 58,85,190/- made in respect of non-genuine unsecured loan u/s. 68. 2. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. The Appellant prays that the addition/ disallowance of Rs. 58,85,190/- made in respect of....
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.... course of assessment, the assessee furnished various details like PAN number, ledger account, postal address, bank statement of the assessee etc. in support of the aforesaid unsecured loan. However, the Assessing Officer observed that the assessee had not furnished "confirmation of the lender" and accordingly, held that the genuineness of the aforesaid loan was in doubt. Accordingly, the Assessing Officer made addition of Rs. 58,85,190/- under Section 68 of the Act by treating unsecured loan taken from "Hariom Enterprise" as being non-genuine. 4. In appeal, the assessee furnished further submissions/details before the Ld. CIT(Appeals), however, he confirmed the additions made by the Assessing Officer with the following observations: "4.....
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.... the identity, genuineness and creditworthiness of Hariom Enterprises. The issue is directly covered by the recent decision of Hon'ble Ahmedabad ITAT, Hon'ble Gujrat High Court and Hon'ble Supreme Court in the case of Pavankumar M, Sanghavi v/s ITO. The Hon'ble ITAT (81 taxmann.com 308) has held that when received unsecured loan but could not produce for verification and these lenders were found to be shell companies, said loan could not be said to be merely filed loan confirmations copies of ledger accounts and other supporting evidences. The relevant observation of the ITAT is also reproduced herein below: "8. As I proceed to deal with genuineness aspect, it is important to bear in mind the fact that what is genuine and ....
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....these entities. These shell entities, which are routinely used to launder unaccounted monies, are a fact of life, and as much a part of the underbelly of the I.T.A. No.2447/Ahd/2016 Assessment years: 2007-08 financial world, as many other evils. Even a layman, much less a Member of this specialized Tribunal, cannot be oblivious of these ground realities." The Hon'ble Gujarat High Court has confirmed the decision of the ITAT and held as under:- "3. Perusal of the orders on record and in particular, the above quoted portion of the order of the Tribunal would make it clear that the entire issue is based on appreciation of evidence on record and thus factual in nature. The Tribunal has given elaborate reasons to come to the conclusion that ....
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.... family members. Since the assessee could not recover amounts due from debtors, assessee had to borrow money from the moneylenders for meeting immediate business requirements. Shri Lalit Kumar (brother of assessee's late husband) arranged for the aforesaid unsecured loan in question. The Counsel for the assessee submitted that the loan was accepted by cheque and was repaid during the year itself from the account of Shri Lalit Kumar (brother of assessee's late husband). Since the funds were arranged through a broker, there was no direct contact with the lender and hence, confirmation could not be placed on record. Further, the assessee filed additional evidences like ledger of the lender in the books of AG Brothers (proprietary concern of Sh....
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..... We have heard the rival contentions and perused the material on record. On going to the facts of the case, we observe that the assessee has filed substantial details to prove the genuineness of the transaction and circumstances in which the loans were taken/repaid by the assessee. It is noteworthy that when the Department has accepted part of the loans taken from the same party Hariom Enterprise as genuine, then it is not understandable that with respect to the balance amount of loan taken from the same party, why the loan has been held to be non-genuine, only in absence of confirmation from such party viz. Hariom Enterprise. Further, it is a well settled principle of law that once the revenue was accepted the repayment of loan, no additi....