TaxTMI 
TaxTMI 
2026 (5) TMI 563
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....te Tribunal (for brevity "ITAT"), Indore Bench, dated 20.01.2025. The dispute pertains to the Assessment Year 2016- 17 and centers on the deletion of an addition of Rs. 6,71,00,000/- made by the Assessing Officer under Section 68 of the Act on account of unexplained unsecured loans. Facts of the case, in short, are as under:- 2. The respondent/assessee (Shree Govind Reality Pvt. Ltd.) is a private limited company engaged in the construction, sale and renting of Aashima Shopping Mall in Bhopal. A search and seizure operation under Section 132(1) of the Act was conducted at the business premises of the assessee on 16.5.2018. Following the search, notices under Section 153A of the Act were issued to the assessee for multiple assessment y....
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....st India Ltd. It is submitted that the lender reported a significant net loss of Rs. 5.69 crores during the relevant period and has no fixed assets, which contradicts its purported ability to advance a loan of nearly Rs. 6.0 crores to the assessee. It is further argued that mere submission of Income Tax Returns and bank statements does not automatically satisfy the requirements of Section 68 of the Act if the underlying financial health of the lender is under suspect. The learned counsel of the appellant further submits that the investigation revealed a specific modus operandi of layering. It is alleged that the lender company received funds in 23 separate tranches from Jay Jyoti India Pvt. Ltd. (which an entity identified by the Department....
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.... providing the PAN details, registered addresses, ITR acknowledgements, and bank statements of the lenders. It is specifically pointed out that M/s East West Finvest India Ltd. is a Non-Banking Financial Company (NBFC) duly registered with and regulated by the Reserve Bank of India. The respondent's advocate argues that the lender's business loss in a specific year does not negate its status as a legitimate financial entity or its capacity to advance loans from its available capital and reserves. The respondent further emphasises that all loan transactions were conducted through transparent banking channels (RTGS/Cheque) and that the assessee has consistently paid interest on these loans. The Department's acceptance of the TDS deducted ....
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.... year 2016-17. In order to show the creditworthiness of the investor company, an Auditor's Report for the assessment year 2016-17 was filed. The Balance Sheet of the Company as on 31.3.2016 was also filed to show funds of Rs. 241,93,90,959/-.Therefore, the CIT (A) has rightly held that the Lender Company had sufficient funds in the form of share capital and reserves & surplus to give an unsecured loan to the respondent assessee. Even otherwise, in the case of Mr.Girish Kumar Sharda [IT(SS) A No.30 to 33/Ind/2012] the ITAT has rightly held that M/s East West Finvest India Limited is a genuine company and not a dummy company. In the cases of M/s Shalimar Housing & Finance Limited, Pramod Kumar Sethi & M/s Tirupati Construction, Ujjain, th....
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....osed the following substantial questions of law:- "(1) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was justified in upholding the order of Ld. CIT(A), which deleted the addition of Rs. 5,91,00,000/- made by the AO on account of unexplained credit u/s 68 of the Act, ignoring that the assessee has failed to discharge the burden placed upon it in respect of an unsecured loan taken from M/s East West Finvest India Limited? (2) Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was justified in upholding the order of Ld. CIT(A) which deleted the addition of Rs. 5,91,00,000/- made by the AOon account of unexplained credit u/s 68 of the Act, ignoring: ....