TaxTMI 
TaxTMI 
2026 (8) TMI 754
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....d his submissions as under. He submitted that in the present appeal, the grievance of the Revenue is deletion of addition under section 68 of the Income-tax Act, 1961 (for short 'the Act') on account of unsecured loan accepted from M/s CEA Consultants P Ltd.. He submitted that the Ld CIT(A) dealt the above issue in para 6.2 to 6.17 of the appellate order and the Ld CIT(A) took into account the fact that the assessee has filed all the evidences in support of genuineness of the loan under appeal which is dealt in para 6.4. Further, he submitted that the ld CIT(A) has also took note of the fact that the loan has been duly repaid by the assessee in subsequent financial year i.e. FY 2016-17 relevant to AY 2017-18 in support of which the confirmation of loan accepted and repaid was submitted and placed in paper book at pages 159-160 respectively. He further submitted that the copy of the relevant period bank statement was also produced showing acceptance of loan at pages 163 and 165 of the paper book. He submitted that the fact of repayment of loan has been duly brought to the notice of AO vide reply dated 06.03.2023 reproduced in order u/s 148A(d) and the same is placed at relevant page....
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....ation entry in question. He submitted that since the basic transaction of loan cannot held to be accommodation entry, there is no justification to assume that any expenditure had been incurred. He further submitted that the Ld CIT(A) on that ground allowed relief which is justified for the reason that for accepting loan, the assessee has paid the interest of Rs. 1,04,250/- which is duly accounted for and is not disallowed by the Ld AO. 7. On the other hand, ld. DR of the Revenue submitted that the order passed by the Assessing Officer is ex-parte under section 147/144 of the Act. Ld. DR submitted that the issue under consideration is accommodating entry. He brought to our notice the relevant findings from the assessment order. He submitted that ld. CIT (A) has given relief to the assessee on the basis of repayment of loan. In this regard, he brought to our notice page 24 of the first appellate order and he objected to the observations made by the ld. CIT(A). In this regard, he relied on the decision of ITAT, Bombay Bench in ITA No.3990/Bom/2025 dated 20.03.2026. He brought to our notice page 14 of the Tribunal order. 8. Considered the rival submissions and material placed on ....
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....lated to the appellant. No opportunity for cross-examination was afforded, violating principles of natural justice. 6.5 I have carefully considered the facts of the case, the contentions of the appellant, the findings recorded by the AO, and the judicial precedents relied upon. The central issue is whether the loan of Rs. 71,00,000/- from M/s Durgapuja Trades and Commerce Pvt. Ltd. received by the appellant can be treated as unexplained u/s 68 of the Act, despite the fact that the loan was subsequently repaid through banking channels and was supported by confirmations, ITRs, financials, and other documentary evidences. 6.6 It is now a settled position of law that for making an addition u/s 68, the assessee is required to prove: (i) identity of the creditor, (ii) creditworthiness of the creditor, and (iii) genuineness of the transaction. Once these three pillars are duly established, the burden shifts to the revenue to bring contrary evidence to disprove the assessee's claim. In the present case, the appellant has discharged the primary onus by furnishing PAN details, income-tax returns, financial statements, confirmation letters, bank statements. Furthermore, the ....
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....abad in ACIT v. Bhavya Construction [2012] 139 ITD 90 (Ahd), where it was held that once the loan is repaid and all necessary documents are filed, the transaction is deemed genuine and cannot be rejected based on mere suspicion or absence of fixed repayment terms. 6.13 Further, in CIT v. P. Mohankala [2007] 291 ITR 278 (SC), the Hon'ble Supreme Court laid down that where the explanation offered by the assessee is reasonable and supported by evidence, and where no material has been found to suggest otherwise, then the addition cannot be sustained u/s 68. 6.14 Further the Hon'ble Delhi ITAT in case of Real Innerspring Technologies (P.) Ltd. v. ACIT (ITAT Delhi) vide its order dated 27-03- 2025 held that when the assessee takes the loan and repaid along with the interest clearly shows that the transactions are genuine. By returning the loan, the assessee has only utilized the loan for the purpose of business and repaid the same. Merely because some operator has managed the affairs, all the transactions cannot be labelled as non-genuinc. Every transaction has to be evaluated on its merit rather than on the basis of suspicion. In the instant case, the assessee has subm....
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....iture of Rs. 1,38,650/- as interest payment on the said loan during the year. Such commission must have been paid in cash and interest expense is bogus, therefore, the AO made addition u/s 69C of the Act. However, in view of the above stated decision in para no. 6.16, wherein it has been held that there were no bogus entries taken, the addition of Rs. 4,93,650/- on account of commission and interest docs not survive. Accordingly, Ground No. 5 of appeal is allowed." 9. Further, we are reproducing the findings of the coordinate Bench in the case of Real Innerspring Technologies P. Ltd (supra) as under :- 10. Considered the rival submissions and material placed on record. We observed that the AO has initiated reassessment proceedings on the basis of information received from the Investigation Wing and search proceedings in the case of Shri Verma. It is brought on record that these two companies were found to be controlled by the accommodation entry providers, Shri Verma and Shri Anil Agarwal. Merely because the assessee has taken the unsecured loan from the companies controlled by them, the addition was made rejecting the various supporting documents provided by the assess....