TaxTMI 
TaxTMI 
2026 (7) TMI 425
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.... satisfactorily explained just by relying on the confirmation of the loaner and the bank account statement of the assessee without considering the application of the first proviso to Sec. 68 of the I.T. Act, 1961. 4. The Ld. CIT(A) erred in granting relief to the assessee even though the assessee had not furnished any documentary evidence to substantiate that she has commenced or undertaken a new business activity of movie financing. 5. The Ld. CIT(A) erred in ignoring the fact that the interest derived during this year is out of the loans advanced in earlier year as evident from the ledger accounts submitted as additional evidence. 6. The Ld. CIT(A) erred in ignoring the fact that the assessee had derived the interest income from almost the same parties as in earlier year wherein she had considered the interest income under the head 'Income from Other Sources'. 7. The Ld. CIT(A) erred in accepting the post-facto claim of the assessee for change of head of income in respect of the interest derived when there was no notable change in activity of the assessee in this year when compared to the previous years. 8. The Ld. CIT(A) erred....
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....s on the ground that except filing name of the person from whom loan has been taken, the assessee has not furnished bank account statement and confirmation from the parties. Similarly, the AO assessed the interest income of Rs. 2,06,91,941/- under the head 'income from other sources' by denying set-off losses form the income business and profession by holding that the assessee failed to establish her claim by furnishing supporting documents and also 'as to how' interest income is assessable under the head 'income from business and profession'. 5. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee challenged the additions made by the AO towards unsecured loan u/s. 68 of the Act by filing relevant details including confirmation from the parties, bank account statement and claimed that she had proved identity, genuineness & creditworthiness. The assessee had also challenged the assessment of interest income under the head 'income from other sources' and argued that since both the businesses i.e. money-lending to film industry & production of motion pictures is coming under one basket and inter-linked, the int....
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....rs, however, not furnished the bank account statement along with confirmation. Further, the assessee has furnished confirmation along with bank statement for the first time before the Ld.CIT(A). The Ld.CIT(A) admitted additional evidences and allowed relief to the assessee without providing an opportunity to the AO as required under Rule 46A of the IT Rules. Therefore, he submitted that the order of the Ld.CIT(A) should be set-aside and additions made by the AO should be upheld and in this regard, he relied upon the decision of the Hon'ble Supreme Court in the case of PCIT v. NRA Iron & Steel Pvt. Ltd., in Civil Appeal No.2463 of 2019 [arising out of SLP (Civil) No.29855 of 2018] and also the decision of the Hon'ble Andhra Pradesh High Court in the case of CIT v. NE Technologies India Pvt. Ltd., reported in [2016] 237 Taxman 151 (Andhra Pradesh). 8.1 The Ld. Counsel for the assessee, on the other hand, supporting the order of the Ld.CIT(A) submitted that the assessee has furnished relevant evidences including confirmation letter from the loan creditors along with their Income Tax Returns and financial statements. The assessee had also filed bank account statement and proved that....
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....ng additional evidences for the first time. In so far as reliance placed by the Revenue in the case of NRA Iron & Steel Pvt. Ltd., we find that the facts of the above case is entirely different and relates to acceptance of loan from entry providers and in the above case, the assessee has not represented before the Hon'ble Supreme Court and explained its case and in the absence of any representation and also on the facts of the acceptance of loan from entry providers, the Hon'ble Supreme Court held that the assessee has failed to prove the identity, genuineness & creditworthiness of the parties. In the present case, since the assessee has established the genuineness of transaction and also proved creditworthiness, in our considered view, the case law relied upon by the Revenue is not applicable to the present case. 8.4 In this view of the matter and considering the facts and circumstances of the case, we are of the considered view that the Ld.CIT(A) has rightly allowed relief and deleted the addition of Rs. 1 Cr. made u/s. 68 of the Act towards unsecured loan taken from M/s.NIPL. Thus, we are inclined to uphold the findings of the Ld.CIT(A) and reject the ground taken by the Reve....
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....ore, he submitted that the order of the Ld.CIT(A) should be upheld and grounds taken by the Revenue should be rejected. 9.3 We have heard both the parties, perused the materials available on record and had gone through orders of the authorities below. There is no dispute with regard to the fact that the assessee has offered interest income received from money-lending business under the head 'income from other sources' for earlier assessment years. However, for the first time, the assessee has changed the head of income and offered interest income under the head 'income from business & profession'. The assessee has explained the reasons for change in head of income and according to the assessee, in earlier assessment years she was engaged only in the business of providing finance to film industry, whereas for the year under consideration along with finance business, she was also engaged in the business of production of motion pictures. Since both the activities are inter-linked & inter-connected and also comes under one management, the assessee has offered interest income under the head 'income from business & profession'. We find that, the assessee is in the business of moneylen....