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| The Tax Publishers2022 TaxPub(DT) 1362 (Mum-Trib) INCOME TAX ACT, 1961
Section 68
Where assessee had filed confirmation of all the parties, ledger copy in the books of parties and bank statement of assessee as well as lender parties and documents indicate that assessee has received loans from the lenders and settled the same before end of the year or subsequent year, further, AO had only considered the accounting entry in the books of accounts and considered the same as accommodation entry without considering the receipt of payment through bank and settlement of the loan by assessee through bank, therefore, addition made under section 68 was liable to be deleted.
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Income from undisclosed sources - Addition under section 68 - Unsecured loan obtained by assessee -
AO received information from DGIT (Inv), Mumbai in respect of beneficiaries of accommodation entries of bogus unsecured loan obtained from the concerns operated by P. During the course of assessment, AO noticed that assessee had received unsecured loans from certain parties. AO observed that said parties are the concerns controlled by P. Assessee had submitted the relevant documents relating to these transactions, which were submitted before AO and submitted that these transactions were genuine and the loan was also repaid in the same assessment year as well as in subsequent assessment year. As far as balance outstanding was concerned, assessee had already cleared the unsecured loans in subsequent years and balance outstanding are NIL and all the transactions were made through the bank only. Since these transactions were transacted with concerns in which P was involved, AO had not convinced with the submission of assessee and accordingly, he proceeded to make the addition under section 68. Held: Assessee had taken unsecured loans from the various parties through bank and the same was settled by the assessee within the same assessment year or subsequent assessment year again through the bank only. Assessee had filed before tax authorities, the confirmation of all the parties, ledger copy in the books of parties and bank statement of assessee as well as lender parties. These documents indicate that assessee has received loans from the lenders and settled the same before end of the year or subsequent year. AO had only considered the accounting entry in the books of account and considered the same as accommodation entry without considering the receipt of payment through bank and settlement of the loan by the assessee through bank. Assessee had taken unsecured loan through bank and repaid the same within the same year or subsequent year. Thus, addition made under section 68 was liable to be deleted.
Relied:Raymond Woollen Mills Ltd. v. ITO & Ors. (1999) 236 ITR 34 (SC) : 1999 TaxPub(DT) 348 (SC) and Deepak Shah v. Asstt. CIT [ITA. No. 4206/Mum/2017, dt. 22-2-2019].
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
IN THE ITAT, MUMBAI BENCH
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