2023 (10) TMI 463

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e as well as low on the subject the learned commissioner of the Income Tax (Appeals) has erred in confirming the action of the assessing officer in making addition of Rs. 2,18,66,082/- on account of unsecured loan of Rs. 1,75,51,113/- plus interest of Rs. 43,14,969/- is disallowed and added u/s. 68 of the income Tax Act, 1961. 2. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax (Appeal) has erred in confirming the action of the assessing officer in ignoring facts that the loan was paid through normal banking channels and no cash deposits were noticed before loan payments which clearly reveal genuineness and creditworthiness of the lender. 3. On the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....y the assessee in these grounds that the learned CIT(A) has erred in confirming the action of the AO ignoring the facts that the loan was received through normal banking channels and no cash deposits were noticed before transmission of amount as unsecured loan to the assessee, which established the creditworthiness of lenders and genuineness of transactions. 5. Replying to the said contentions of assessee raised by way of ground nos.1 and 2, the learned CIT-DR supporting the action of the AO submitted that the assessee has failed to discharge the onus of establishing creditworthiness of lender and genuineness of transactions. He thus submitted that after detailed verification and examination of documentary evidence filed by the assessee ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ore, the incurring of interest expenditure also becomes not allowable. From the first appellate order, we note that the learned CIT(A) has upheld the addition with following observations and findings: "In response to the above show cause notice dated 03/12/2018, the appellant uploaded its reply dated blank Dec. 2018, uploaded on 06/12/2018. From the financials, the AO found that the appellant has taken unsecured loans of Rs. 1,75,51,113/- from P.R. Niryat Pvt Ltd. In response to the notice u/s 133(6). P.R Niryat Pvt Ltd has submitted ITR, Ledger account of M/s Acumen Infrastructure (P) Ltd, Bank statements and source of funds. On perusal of these documents, the AO noted that the source of funds in majority of cases has been from ei....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d not prove the credit worthiness of the above lender. Decision of Hon'ble High Court of Calcutta in the case of CIT v Mihir Kanti Hazra(supra) is squarely applicable to the facts of the present case. Accordingly, the addition of Rs. 1,75,51,113/- u/s 68 on account of unsecured loan from P.R. Niryat Pvt. Ltd is upheld. Since loan has been held as bogus, the interest of Rs. 43,14,969/- cannot be allowed in the instant case. Accordingly, the addition of Rs. 1,75,51,113/- u/s 68 on account of unsecured loan from P.R. Niryat Pvt. Ltd and the disallowance of the interest of Rs. 43,14,969/- are upheld in the instant case. Ground. No. 1(a), 1(b) & 1(c) are decided against the appellant." 7. On careful consideration of the above submissions,....