2025 (12) TMI 174

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....ns taken during the instant financial year. The Revenue has also challenged the deletion of Rs. 4,99,125/- by the ld. CIT(A) as made by the ld. AO in respect of interest payments on above unsecured loans. Rs. 75,000/- towards commission at the rate of 0.50% for arranging the accommodation entries was also under challenge. 03. The facts in brief are that the assessee is covered under search u/s 132 of the Act on 08.03.2022. The notice u/s 148 of the Act was issued on 11.10.2023, after obtaining the approval of the competent authority. The assessee filed the return of income on 19.10.2023 in response to the said notice declaring total income of Rs. 62,35,480/-. The case of the assessee was selected for scrutiny and statutory notices along with questionnaire were duly issued and served on the assessee. The assessee replied to the said notices vide written submission dated 08.01.2024. The ld. AO during the course of assessment proceedings observed that the assessee is a beneficiary of bogus unsecured loans from entities, managed and controlled by the entry operator Shri Rajkumar Kothari. The ld. AO noted in para 7, the details of three parties from whom the assessee borrowed aggrega....

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..... Alom Extrusions Limited [ITAT/268/2024] vide order dated 17.12.2024. Ambe Tradecorp (P) Ltd. Vs. PCIT (2022) 145 taxmann.com 27 (Gujarat). The ld. CIT(A) also followed the decision of Hon'ble Supreme Court in case of CIT Vs. Orissa Corporation Pvt. Ltd. 159 ITR 78 (SC). The ld. CIT(A) by relying on the above decision observing and holding as under:- "6.2.18. In view of the various judicial pronouncements cited by assessee together with various evidential documents submitted by the assessee, it can be inferred that since the assessee had taken loan in case of normal business and repaid the said loan through banking channel in the next FY, the assessee cannot be said to be beneficial owner of the money without any cogent evidence brought by the AD on record and addition under section fil by the AO cannot be sustained. Additionally, as discussed above, the assessee's burden is confined to prove identity of the creditors, creditworthiness of creditor and genuineness of the transaction with reference to transaction between assessee and creditor and the same cannot be extended to include source of such creditor for the purpose of section 68 of the Act. The burden of th....

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.... be expenses incurred by the assessee in respect of commission paid to the entry operators is nothing but an Imaginary fictional story. Hence, in view of the above the addition of Rs. 75,000/- as estimated by the AO @0.5% of total loan of Rs. 1,50,00,000/- is liable to be deleted. Hence, this ground of the assessee is also allowed." 05. After hearing the rival contentions and perusing the material on record, we find that in this case, the assessee has received loans from three parties. We note that the assessee filed all the evidences/documents qua the said loans before the AO as well as before the Ld. CIT(A). We also note that the notices issued u/s 133(6) of the Act to all the three lenders were not complied with by two whereas the third one filed incomplete details. We also note that the Ld. CIT(A) has also recorded a detailed finding of fact that these loans were repaid in the subsequent years and therefore, no addition can be made u/s 68 of the Act. In this case we find that the assessee has filed all the evidences before the AO qua these loans and AO has not pointed out any defects in the said evidences except that the lenders were having very less operational income, no f....

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....n paras 5.1 and 5.2 respectively, the Commissioner of Income-tax in the appeal preferred by assessee found on facts and the material before it that the said two cash creditors had been holding there identity, creditworthiness and genuineness in respect of the loan transactions. 3.2 The appellate authority observed that, "In this regard, it has been noticed that ledger accounts and confirmations of the aforesaid two parties have been provided by the appellant to the AO in the assessment proceedings. Thereafter, the AO also carried out the independent inquiries u/s. 133(6) of the I.T. Act and in compliance thereto both the companies have submitted the requisite information." 3.3 The information supplied by assessee was duly noticed by appellate authority and facts in that regard were recorded also to arrive at a finding that the unsecured loans to the aforesaid parties have been paid by account payee cheques from the bank account of the assessee which was not in dispute, muchless in doubt. The accounts were finally settled with the repayment of the loan to the lender companies. 3.4 When the revenue preferred appeal before the Appellate Tribunal, the Tribuna....