2025 (6) TMI 1035

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....ted 28.06.2024, passed u/s 250 of the Income-tax Act, 1961, (hereinafter referred to as "the Act" for short) for the Assessment Year (AY) 2018-19. 2. The Revenue has taken following grounds of appeal:- "The Ld. CIT(A) has erred in law and on facts in deleting the addition made on account of unsecured loans of Rs. 12,30,00,000/- received from various entities treated as unexplained cash credit u/s. 68 of IT Act (b) The Ld. CIT(A) has erred in law and on facts in deleting the disallowance of interest expenditure on unsecured loans of Rs. 1,38,30,604/- under section 37(1) of IT Act made by AO treated it as not incurred for the purpose of business u/s. 37(1) of IT Act?" 3. The brief facts of the case are that the assesse....

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..../- and (iii) M/s Siddhi Trading Co. for Rs. 5,00,000/-, therefore, the entire loan amount of Rs. 2,48,00,000/- has been rightly treated by the Assessing Officer as unexplained income of the assessee u/s 68 of the Act. With regard to the disallowance of the interest on unsecured loans, the Ld. DR submitted that since the assessee has failed to establish the creditworthiness of M/s Raina Commodities Private Limited and Meenaben M. Parikh as stated above, the interest paid by the assessee on the unsecured loans to these parties amounting to Rs. 1,38,30,604/- has been rightly disallowed by the Assessing Officer u/s 37(1) of the Act. 7. The Ld. AR, on the other hand, submitted that the assessee had obtained the unsecured loans from the clo....

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....ted identity as well as genuineness of the transaction has been proven by the assessee. As may be verified from the record that in the ledger account, there has been an opening balance of Rs. 9,41,98,796/- as on 01.04.2017. Thus, on one hand, the Assessing Officer has prima facie accepted the genuineness of transaction and source of amount of Rs. 8.37 crores, there is no justification in drawing an adverse inference and making addition of Rs. 9.82 crores in the hands of the assessee. Further, out of the referred amount, the assessee has repaid Rs. 15 crores including interest payable by way of cheques between 05.02.2021, 06.02.2021 and 10.02.2021 drawn on HDFC Bank and further payments in F.Y.2021-22, including the repayment of further loan....