Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 353 - AT - Income TaxUnexplained credit u/s. 68 - addition made towards unsecured loans - verification additional evidence filed before CIT(A) - HELD THAT:- The assessee has segregated credits into three parts, as per which, credits in the form of return of advances given by the assessee to various parties in the earlier period, credits in the form of maturity proceeds of FDs and cash deposits; finally, credits in the form of unsecured loan accepted from various parties. As regards first kind of credits, i.e. repayment of advances given to various parties, although the Ld.CIT(A) has stated that the assessee has filed complete details, but whether these documents were part of AOs records or not is a question needs to be examined. Insofar as credits in the form of maturity of FD also, there is no discussion in the order of Ld.CIT(A) with regard to the source of such FDs. As regards unsecured loan taken from various individuals, the primary objection of the AO is with regard to genuineness of transactions and creditworthiness of the parties. But, the Ld.CIT(A) recorded his finding only on the issue of identity of the parties ignoring the other two aspects brought out by the AO including capacity of the parties to explain source of investments. According to the AO, none of the creditors had sufficient income to explain source, but there is no discussion in the order of the CIT(A) about this observation. Insofar as loan taken from Aditya Patel of ₹ 50 lakhs, the assessee, before the AO has claimed that he had accepted loan from the party for which assessment details have been filed. Before the Ld.CIT(A), the assessee has made an altogether different submission to argue that even though Aditya Patel is having minimum income in his return of income, but the source of credit was from loan for which details of company alongwith PAN was submitted to the AO. Before us, the asessees has come out with one more argument that this is an advance received from the party against sale of certain agricultural land which has been finally adjusted towards sale consideration of land - issue needs to be examined by the AO in light of the claim of the assessee that sufficient evidence has been filed in order to prove identity, genuineness of transaction and creditworthiness of the parties. Disallowance of interest expenditure - HELD THAT:- We find that the assessee has filed complete details of interest expenses paid to Shamrao Vithal Co-operative Bank Ltd towards funds borrowed to make various income generating investments. When the assessee has offered to tax interest income generated from investments, corresponding expenses incurred including interest on loan borrowed from banks needs to be allowed as deduction. CIT(A), after considering relevant facts, has rightly allowed interest paid to Shamrao Vithal Co-operative Bank Ltd. We do not find any error in the findings of the Ld.CIT(A) while deleting addition made towards interest. Hence, we are inclined to uphold the findings of Ld.CIT(A) and reject ground taken by the revenue.
|