TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1428
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....lowing grounds: - "1. On the facts and in law, the Ld. Commissioner of Income Tax (Appeals) [in short Ld. CIT(A)] erred in confirming the addition made by the Ld. Assessing Officer [in short Ld. AO] to the tune of Rs. 4,27,57,000/- under Section 68 of the Act disallowing the unsecured loan as income of the Appellant for the relevant assessment year. 2. On the facts and in law, the Ld. AO erred in making the impugned addition when there was no flow of money or cash but there was mere journal entry. Thus, when there is no physical transferred of money, provision of Section 68 shall not be applicable. 3. On the facts and in law, the alleged transactions were entered in books of accounts of the Assessee by way of journal entry as it did n....
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....ring the assessment proceedings, it was observed that the assessee had taken and squared up loans, during the year under consideration, from the following related parties: - (a) Mrs. Komal Ahuja (wife of the assessee) (b) Mrs. Prerna Ahuja (daughter-in-law of the assessee) (c) M/s Komal Exotic Spices Pvt. Ltd. (in which Mrs. Komal Ahuja and Mrs. Prerna Ahuja were Directors). 5. In order to examine the genuineness of the transaction and creditworthiness of the lenders, the assessee was asked to submit return of income and capital account (if maintained) of Mrs. Komal Ahuja, Mrs. Prerna Ahuja and M/s Komal Exotic Spices Pvt. Ltd. From the details filed by the assessee, it was observed that during the year under consideration, Mrs. Prer....
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....d. was shifted to Mrs. Prerna Ahuja through a journal entry. Accordingly, doubting the genuineness of the transaction and the creditworthiness of Mrs. Prerna Ahuja, the AO made an addition of Rs. 4,27,67,000/-, being the loan received from Mrs. Prerna Ahuja under section 68 of the Act. 7. The learned CIT(A), vide impugned order, upheld the addition made by the AO under section 68 of the Act, by observing as follows: - "5.3.5 The appellant has submitted that only journal entry was passed on behalf of Prerna Ahuja in the books of the account of M/s. Ahuja Traders (Proprietor Gopal Ahuja). However, from details submitted, it is seen that M/s. Ahuja Traders has received amount of Rs. 4,27,67,000/- on various dates. Further, the payment was a....
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....the auditor has certified that the unsecured loan from Prerna Ahuja was received by cheque. Therefore, the addition of Rs. 4,27,67,000/- made by the AO u/s.68 is upheld." Being aggrieved, the assessee is in appeal before us. 8. We have considered the submissions of both sides and perused the material available on record. During the year under consideration, the assessee received a large sum of money from its related parties as a loan. As evident from the record, these parties are none other than the wife of the assessee, the daughter-in-law of the assessee and the company in which both the aforesaid individuals are Directors. Since the assessee could not prove the genuineness of the transaction and creditworthiness of the loan of Rs. 4,27....
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....al Exotic Spices Pvt. Ltd. regarding the payment to Mrs. Prerna Ahuja through escrow, i.e., the assessee. We find that a copy of the board resolution is also placed on record by the assessee in its paper book at page 123, apart from the Memorandum of Understanding entered into between Aamby Valley Ltd. and Mrs. Prerna Ahuja, which forms part of the paper book from pages 124 to 128. As per the assessee since the transaction with Aamby Valey Ltd. did not go through the entire money with the assessee which was payable to Mrs. Prerna Ahuja was returned to Komal Exotic Spices Pvt. Ltd. As per the assessee, since the said money was held by the assessee in its fiduciary capacity as an escrow, though the same was received from M/s Komal Exotic Spic....