TaxTMI 
TaxTMI 
2024 (6) TMI 149
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....or "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 submission. In the submission, assessee stated that maj....
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....cumentary 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 on 331.03.15 New funds procured during the year 1 Ashok K Meht....
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....T-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 in the audit report for assessment year 2013-14, which is already on record. The ld CIT(A) on appreciation of such facts deleted the addition to the extent of Rs. 3.53 Crore. With regards to loan of Rs. 1.42 crores, the ld AR for the assessee argued that these loans inclusive of interest amount and opening balance. The fresh loan d....
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....rs 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 furnished 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 assessee also filed copy of ledger account for confirmation of various parties. The assessee stated that loans taken in earlier years cannot be added under section 68 of the Act in the year under consideration....