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2015 (11) TMI 854 - AT - Income TaxAddition as unsecured loan received from one of its directors - Held that:- Before us the assessee has filed loan account of the director in the books of the assessee-company. However, the question raised by the Commissioner of Income-tax (Appeals) regarding the source of funding the assessee-company remained unanswered. The Commissioner of Income-tax (Appeals) had raised a very valid doubt, that is, if the director has returned his income of ₹ 1,50,820 in the assessment year 2008-09, how he can extend loan of ₹ 40,00,702 to the assessee-company. The learned authorised representative has not been able to place on record for any cogent evidence in the form of bank statement, statement of asset and liability of the assessee, etc., to dispel the shadow of doubts. It is a well accepted principle that to accept a credit as genuine all the three conditions, i.e., identity of person who has accepted the loan, genuineness of transaction and creditworthiness of the person extending loan has to be satisfied. If any of the aforesaid conditions are absent the loan transaction comes under cloud. In the present case the assessee has not been able to establish the creditworthiness of the director of the company who has purportedly extended loan. We concur with the findings of the Commissioner of Income-tax (Appeals) on this issue. - Decided against assessee. Ad hoc disallowance under the head "Other expenses" - Held that:- In the absence of details of expenditure, the Assessing Officer made ad hoc disallowance of ₹ 5,00,000. In the first appeal the Commissioner of Income-tax (Appeals) examined each and every expenditure and thereafter, reduced the disallowance to ₹ 2,00,000. We do not find any infirmity with the findings of the Commissioner of Income-tax (Appeals).- Decided against assessee.
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