TaxTMI 
TaxTMI 
2026 (9) TMI 1398
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....response to which the assessee filed the requisite details. During the course of assessment proceedings the Assessing Officer noted that the assessee has received unsecured loans from the following parties: S. No. Particulars Loan Amount Interest Amount 1 Ambashree Infratech Pvt Ltd. Rs. 50,00,000/- - 2 Best Advisory Pvt. Ltd. Rs. 25,00,000/- Rs. 2,12,310/- 3 Dinbandhu Suppliers Pvt. Ltd. Rs. 15,00,000/- Rs. 8,987/- 4 Maa Shanti Business Pvt. Ltd. Rs. 1,70,00,000/- - 5 Origin Deal Trade Pvt. Ltd. Rs. 25,00,000/- Rs. 1,12869/- 6 Total Rs. 2,85,00,000/- Rs. 3,34,166/- 3. He, therefore, asked the assessee to produce loan confirmation, ITR, financial statements and bank statements of all the loan creditors in order to verify the identity and creditworthiness of the loan creditors and genuineness of the transactions. The assessee in response to the same produced confirmation, ITR, financial statements, MOAs of the loan creditor companies and bank statements. Thereafter, the Assessing Officer sent his Inspector to Kolkata to verify whether all these loan creditor companies do actually exist in given ad....
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....ults show that the Kolkata-based companies were not found at their registered/principal places of business; they disclosed meagre incomes and no real operations; there were cash/antecedent credits immediately prior to advancing funds; and the shareholding/fund-flow reflects circular layering through a web of related entities. Viewed cumulatively, and applying the test of human probabilities, the impugned "loans" do not inspire confidence and represent a device to introduce unaccounted funds in the guise of unsecured loans. 5.1.4 At the same time, it is relevant to note that the AO has not dealt with an namely, the repayment of the impugned loans. The equally significant aspect record shows that the appellant company had repaid all the loans under consideration either immediately after their receipt or well before completion of the assessment proceedings. For instance, the loan from M/s Ambashree Infratech Pvt. Ltd. amounting to Rs. 50,00,000/- was received on 20.04.2015 and repaid on 25.04.2015 and 28.04.2015, thereby squaring off the account within barely eight days. When viewed objectively, such prompt repayment does not align with the AO's theory of introduction of ....
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....oans received from M/s Best Advisory Pvt. Ltd. and M/s Origin Deal Trade Pvt. Ltd by holding that once the loans are repaid, no addition u/s 68 is warranted. The facts in the present year are materially identical, and therefore, judicial discipline requires that the binding decision of the jurisdictional ITAT be respectfully followed. The Hon'ble Tribunal has also categorically held that once the principal loan is accepted as genuine, the consequential disallowance of interest expenditure thereon cannot survive. In view of the above factual and legal position, and respectfully following the binding precedent of the jurisdictional ITAT in the appellant's own case, the additions made by the AO on account of unsecured loans amounting to Rs. 1,15,00,000/- and interest disallowance of Rs. 3,34,166/- are directed to be deleted. Accordingly, Ground Nos.1 and 2 are allowed." 6. Aggrieved with such order of the Ld. CIT(A) the Revenue is in appeal before the Tribunal by raising the following grounds: 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition of Rs. 1,15,00,000/- made by the AO u/s 68 of....
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.... terms of the ratio of SC decision in case of Kanpur Coal Syndicate (1964) 53 ITR 225 (SC)? 6. Any other ground that may be raised during the course of appellate proceeding. 7. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that the loans have been repaid in the subsequent years. From the various details furnished by the assessee we find the assessee has repaid the loans along with interest where applicable, the details of which are as under: Loan creditors Opening balance as on 1-4-15 unsecured loan received loan repaid Interest credited during the year Closing balance as on 31-3-16 M/s.Ambashree Infratech P Ltd. --- 25,00,000 (20-4-15) 25,00,000 (20-4-15) 25,00,000 (25-4-15) 25,00,000 (28-4-15) Repaid during the year --- --- M/s.Best Advisory P Ltd 12,27,664 25,00,000 (9-9-15) --- 2,12,310 (Rs. 2,35,900 minus TDS of Rs. 23,590) 39,39,974 (Rs. 42,60,453 repaid on 4-10-18) M/s.Dinbandhu Suppliers P Ltd. ....
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....e the assessee received loan from a company, since trail for obtaining of loan and repayment thereof were proved and lender had duly filed its return of income encompassing transactions carried with the assessee, additions made by Assessing Officer towards unexplained credit under section 65 in case of the assessee were wholly unjustified. The relevant observations of the Tribunal read as under: "9.3. The factum of repayment quells the apprehension entertained by the Revenue. The over-riding factum of repayment of loan itself repels any form of disguise on the part of the assessee and dispels the perception of any sordid or extraneous affairs. The clinching evidences towards loan procurement discharge the primary onus which lay upon the assessee under s. 68 of the Act. Besides, the loan itself having been repaid, the assessee does not ultimately stand to gain any spurious benefit from such alleged unexplained cash credit. Such fact justifies the plea of the assessee towards existence of bonafides in the transactions. In the totality of facts, where the trail for obtaining of loan and repayment thereof is proved and the lender has duly filed its return of income encompassin....
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....refore, it is requested to admit/ allow the present TA. 6. Having heard Shri Pranav Desai, ld counsel appearing on behalf of the revenue and on perusal of the order passed by the CIT(A) confirmed by the Tribunal, it appears that CIT(A) was satisfied with respect to the genuineness of the transaction and creditworthiness of Shri Ishwar Adwani and, therefore, deleted the addition of Rs. 145 lakhs made by the AO. It is required to be noted that as such an amount of Rs. 100 lakhs vide Che.No.102110 and an amount of Rs. 60 lakh vide Che.No.102111 was given to the assessee and out of the total loan of Rs. 160 lakhs Rs. 15 lakh vide Che.No.196107 was repaid and, therefore, an amount of Rs. 145 lakhs remained outstanding to be paid to Shri Ishwar Adwani. It has also come on record that the said loan amount has been repaid by the assessee to Shri Ishwar Adwani in the immediate next FY and the Deptt has accepted the repayment of loan without probing into it. In the aforesaid facts and circumstances of the case, when the Tribunal has held that the matter is not required to be remanded as no other view would be possible, we see no reason to interfere with the impugned order passed by ....
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....ation was carried out in Shri Bhanwarlal Jain Group on 3-10-13, wherein it was found that Shri Jain along with his associates had provided accommodation entries in the form of ULs/ deposits/ purchase entries to a large number of parties through various benami concerns controlled by them, by taking equivalent amount of cash. The assessee, proprietor of Pooja Construction, was one of the beneficiaries of accommodation entries from M/s.Daksh Diamonds operated by Shri Jain and Group. Based on the said information, the AO reopened the assessment by issuing notice u/s 148 on 28-3-14. On the basis of the statement recorded u/s 132(4)/131 during the course of search, the AO made an addition of Rs. 50 lakhs of ULs shown by the assessee during the impugned AY and an amount of Rs. 4,50,000 towards intt payment. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the ld CIT(A). The ld CIT(A) held that (i) the AO has solely relied upon the statement of Shri Bhawarlal Jain and did not carry out any worthwhile independent inquiry in the matter, (ii) the AO has totally ignored the documentary evidence submitted by the assessee, (iii) even if some of the transactions e....
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.... 6-9-10 and (vi) P&L account, balance sheet and IT return of the appellant for AY 07-08. It is clarified by him that the above documents were filed before the AO and CIT(A). 7. Here is a case, clearly defined by the accounts. The ledger account of Daksh Diamonds appearing in the books of accounts of the assessee shows that on 3-7-06, the assessee received Rs. 30 lakhs vide che.No.812561 and Rs. 20 lakhs vide che.No.812562- being amounts received towards loan from Daksh Diamonds (Indusland Bank Ltd, Opera House Branch, Indusland House, 425 Mumbai-04). On 6-5-10 the assessee issued che.No.265949 amounting to Rs. 20 lakhs being cheque to Daksh Diamonds towards refund of loans. Further, on 22-6-10 the assessee issued che.No.263943 amounting to Rs. 30 lakhs being cheque to Daksh Diamonds towards refund of loans. The transactions were routed through Vijay Bank. The ledger confirmation by Daksh Diamonds tell the same facts. The search and seizure action conducted by the Deptt in Bhanwarlal Jain Group took place on 3-10-13. The loans taken by the assessee from Daksh Diamonds in the year 2006 was refunded in the year 2010. One has to respect the transactions which occurred....
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....g the position, no fault can be found with the view taken by the Trib." v) Ravindra Arunachala Nadar v. ACIT (2021) 129 taxmann.com 275 (ChenTrib) wherein speaking through one of us Judicial Member, held as under: "9. Coming to invocation of sec 68, the AO has simultaneously invoked sec 68 in addition to sec 41(1), to bring into tax, said credit for the impugned AYs, but fact remains is that all these credits were brought forward from earlier FYs for which necessary evidences has been placed on record. On perusal of evidences filed by the assessee, we find that the credits in the name of S/Shri ARKA. Karutha Pandian, KA Sekar and K. Sivasundarapappa and Late ARK Arunachala Nadar, was received in FY07-08. Similarly, credit in the name of Smt. Swarnalatha was received in the FY 06-07, likewise credit on account of land advance from Shri Kumar was received in the FY 05-06. From the above, it is very clear that none of the credits were received during the current FY. Therefore, in our considered view these credits cannot be brought to tax as unexplained cash credits u/s 68, because in order to bring any credits within the ambit of sec 68, said credits should be found ....