TaxTMI 
TaxTMI 
2026 (7) TMI 1965
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....o filed by the assessee was selected for scrutiny. 5. In course of assessment proceeding, the Assessing Officer (A.O. for short) noticed that during the year under consideration, the assessee had received unsecured loans of Rs. 5,63,39,550/- from M/s. Kuber Trexim Pvt. Ltd. and Wall Street Capital Market Pvt. Ltd. On further verification, he found that the assessee has repaid loan amounting to Rs. 5,63,39,550/- availed in the earlier assessment year from Wall Street Capital Market Pvt. Ltd. and received fresh loan of the same amount from M/s. Kuber Trexim Pvt. Ltd. The A.O. observed, as per the information availed in official website of Ministry of Corporate Affairs, it was found that both M/s. Kuber Trexim Pvt. Ltd. and Wall Street Capital Market Pvt. Ltd. were having the same address and are controlled and managed by the same promoters/directors. Since, the aforesaid two entities shared a common address and were having common directors/promoters, the A.O. issued a commission to the Investigation Wing at Kolkata to verify the genuineness of the loan transaction. After conducting enquiry, the Investigation Wing, Kolkata furnished a report dated 29.04.2016 stating that no such co....
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.... and creditworthiness of the creditor and genuineness of the loan transaction. He noted that in subsequent assessment years the loan has been repaid. Even, the assessee has paid interest on the loan after deduction of tax. All the transactions were through proper banking channel. He observed, once the assessee has proved the source of the loan transaction through documentary evidences and source is not doubted, the A.O. cannot call upon the assessee to prove source of source. He observed, if the source from which the lender received the money is in doubt, addition can be made in case of the lender and not at the hands of the assessee, more so, when the lender is an Income tax assessee. 8. Further, ld. First appellate authority observed, in case of the lender no such addition has been made. Thus, he ultimately, concluded that the loan transaction is genuine. Hence, deleted the addition made u/s. 68 of the Act. 9. Before us, ld. Departmental Representative (ld. DR for short) submitted that the loan taken earlier by the assessee from one entity was repaid and again received that loan through another entity. He submitted, this circular transaction creates doubt regarding the genu....
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....the Act. In the statement recorded, the Director of M/s. Kuber Trexim Pvt. Ltd. had clearly and categorically confirmed of advancing the loan to the assessee. Further, he also explained the source of source. He submitted, in case of M/s. Kuber Trexim Pvt. Ltd. the loan transaction was accepted. Thus, he submitted, there cannot be any addition u/s. 68 of the Act in case of the assessee. 11. We have considered rival submissions and perused the materials available on record. We have also applied our mind to the decisions relied upon. Undisputedly, in the year under consideration, the assessee had received loan of Rs. 5,63,39,550/- from M/s. Kuber Trexim Pvt. Ltd. In course of assessment proceeding, in response to the query raised by the A.O., the assessee had furnished the following documentary evidences to prove the loan transaction: a) Copy of ledger and bank statement of M/s. Kuber Trexim Pvt. Ltd. b) Confirmation of loan transaction. c) TDS certificate evidencing deduction of tax at source on interest paid d) Ledger and bank statement of M/s. Kuber Trexim Pvt. Ltd., reflecting the repayment of loans in subsequent years. e) Ledger and....
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....oving them has made the addition purely on conjecture and surmises by making general observations regarding the modus operandi of the lender entities. This, in our view, is unacceptable. In fact, in course of proceedings before this forum, the bench had directed the department to furnish the status of the loan transaction at the hands of the lender entity in the very same assessment year. However, in the report furnished before the Bench the department has stated that no such record is available with the department. Thus, in absence of any contrary evidence to demonstrate that the loan transaction is non-genuine, we are not in a position to disturb the finding of ld. First appellate authority, which are purely factual. In this context, the following finding of fact by ld. First appellate authority are relevant: 1. The lender, Kuber Trexim Pvt. Ltd., is a regular Income Tax assessee, who filed its Return of Income and was assessable under the Income Tax Act since past several years. The Balance Sheet of the same is available in the records of Department. (Copy of ITR and balance sheet of lender submitted before me) 2. The unsecured loan has been received in the reg....