TaxTMI 
TaxTMI 
2024 (6) TMI 149
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....ing income at Rs. 1,30,910/. The case was selected for "limited scrutiny" for reasons of mismatch in amount paid to related parties under section 40A(2)(b), reported in audit report and large increase of unsecured loan during the year. During assessment, the Assessing Officer noted that assessee had taken unsecured loan of Rs. 4.96 crores. The assessee was issued show cause notice to prove the identity, creditworthiness in genuineness of transactions of unsecured loans. The Assessing Officer noted that assessee furnished reply and conformation, without furnishing any evidence establishing the identity creditworthiness and genuineness of such transactions. The Assessing Officer took his view that assessee failed to satisfy the three conditions to prove the genuineness of such unsecured loans. The Assessing Officer treated the said unsecured loan aggregating of Rs. 4.96 crores and added under section 68 of the Act in his assessment order passed under section 144 of the Act on 29.12.2017. Aggrieved by the addition made in the assessment order as well as passing order under section 144, the assessee filed appeal before Ld.CIT(A). 3. Before Ld.CIT(A) assessee filed detailed written s....
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....2.2023. In rejoinder, the assessee has filed numerous documentary evidence during assessment proceedings as well as along with submission dated 10.08.2020 and 23.11.2023 respectively. The assessee stated that all such submissions and evidence were forwarded before Assessing Officer for furnishing remand report. Therefore, it is not correct to say that submission of assessee was without any evidence, neither the Assessing Officer nor the assessment unit called any further details or evidence during the course of remand proceedings. Even the documents available on assessment record was also ignored. The assessee reiterated that it also furnished repayment of new unsecured loan. Therefore, appeal of assessee may be decided. 5. The Ld.CIT(A) on considering the submission of assessee prepared a summary of unsecured loan from 25 parties as recorded on page-16 of his order. The Ld.CIT(A) prepared a summary of opening cash balance as on 01.04.2014, closing balance as on 31.03.2015 and new funds / loans received during the year. For appreciation of fact, summary prepared by Ld.CIT(A) is reproduced below: Sr. No. Name of lender Opening balance as on 01.04.14 Closing balance as....
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.... remaining addition of Rs. 3.35 crores, which was closing balance of loans were deleted. Further aggrieved, the assessee has filed present appeal before the Tribunal. 7. We have heard the submission of Ld. Authorized Representative (Ld.AR) for the assessee and Ld. Commissioner of Income Tax- Departmental- Representative (Ld. CIT-DR) for the Revenue and have gone through the order of lower authorities carefully. The ld AR for the assessee submits that majority of loans were received in earlier years. The total unsecured loan including balance of unsecured loan of Rs. 3.496 crores as on 31.03.2015, majority of which are old loan, which was taken earlier years. The bifurcation of old loan as outstanding on 31.03.2015 including of interest of Rs. 3.53 crores as well as new loans taken during the year along with interest as on 31.03.2015 of Rs. 1.42 crores. The ld AR for the assesses submits that in order to prove the genuineness of loan, assessee furnished the address, PAN and copy of ledger account with confirmation of various parties. The loans taken in earlier years cannot be added under section 68 of the Act in the year under consideration as all such loans are clearly evident i....
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....T(A). The ld Sr DR for revenue submits that the ld CIT(A) has already allowed relief with regard to loan which was taken in earlier year. The ld SR DR for the revenue submits that the assessee is not eligible for further relief as per the specific finding of ld CIT(A) on page 17 of his order that most of the lenders are showing the return of income ranging from Rs. 2.50 Lacs to Rs. 3.00 lacs. Thus, the lenders are not creditworthy. The ld CIT-DR for revenue prayed for dismissal of appeal. 9. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities carefully. We have also deliberated on various case laws relied by the ld. AR for the assessee. The AO made addition of unsecured loan of Rs. 4.59 Crore by taking view that such loan remained unexplained as the assessee has not furnished satisfactory evidences. We find that before ld CIT(A) the assessee submitted that total amount of unsecured loan including balance of unsecured loan of Rs. 3.496 crores as on 31.03.2015 and that majority of which are old loan, which was taken earlier years. The increase in loan balance is only on account of interest application. The assessee furn....
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.... details. All the details are available on page No. 12 and 12A of paper book. On cross verification, we find that the details of repayments are correct. Even otherwise, such repayments are not controverted by the revenue, despite providing all the details in advance. We find that the Hon'ble Jurisdictional High Court in CIT Vs Ayachi Chandrashekhar Narsangji (supra) held that where the department has accepted repayment of loan in subsequent year, no addition was to be made in current year on account of cash credit. We find that on the basis of such legal ratio, this bench in various cases including in ACIT Vs Naresh Nemchand Shah (2023) 146 taxmann.com 351 (ITAT Surat), Rajhans Construction (P) Ltd. (2022) 140 taxmann.com 370 (ITAT Surat) has taken a similar view. 11. The Hon'ble Jurisdictional High Court in CIT Vs. Amber Tradecorp (P) ltd. ((2022) 145 taxmann.com 27 (Guj) also held that where the assessee took loan from two parties and assessee has furnished requisite material showing identity of loan givers and that assessee was not beneficiary as loan was repaid in subsequent year, no addition under Section 68 could be made on account of such loan. The Hon'ble Guj....