TaxTMI 
TaxTMI 
2025 (8) TMI 1428
X X X X Extracts X X X X
X X X X Extracts X X X X
.... this appeal, the assessee has raised the following 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 boo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 143(2) and section 142(1) of the Act were issued and served on the assessee. During 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. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... no loan was received from Mrs. Prerna Ahuja and the loan outstanding against M/s Komal Exotic Spices Pvt. Ltd. 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s Pvt. Ltd., Prema Ahuja and the appellant. The appellant has also not proved that it was a journal entry and in fact 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 Dir....
X X X X Extracts X X X X
X X X X Extracts X X X X
....013, forming part of the paper book at pages 63-69. According to the assessee, a board resolution was also passed by M/s Komal 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 mo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on. In the present case, it is also pertinent to note that there is no allegation by the lower authorities regarding any circular trading of unaccounted money between related parties. Further, no evidence has been brought on record contrary to the claim of the assessee of the transaction with Aamby Valey Ltd. in respect of the plot of land in Aamby Valey City. Therefore, we are of the considered view that the assessee sufficiently explained the genuineness of the transaction. As regards the creditworthiness of Mrs. Prerna Ahuja, from the perusal of the ledger account and bank statement submitted by the assessee as noted above, we find merit in the submission of the assessee that the money received from M/s Komal Exotic Spices Pvt. Ltd. was ....