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2021 (6) TMI 211 - AT - Income TaxUnexplained cash credit u/s 68 - assessee obtained from dubious companies providing accommodation entries and having no justified financial for lending such money - grievance of the assessing officer is that these companies do not have substantial income and hence are not capable of giving loans - HELD THAT:- We find that the funds position of the companies as noted by the ld.CIT(A) is quite capable of granting loans. The adverse inference drawn from the financial statement of lending companies is only a surmise by the assessing officer without making any enquiry. As in the case of Pr.CIT vs Veedhata Tower Pvt.Ltd, [2018 (4) TMI 1004 - BOMBAY HIGH COURT] has held that when all the necessary details of the fund provider was available with the assessing officer, he was free to make the necessary enquiry and addition under section 68 in the hands of the recipient were unjustified. Furthermore, assessee has also paid interest to the lenders. It has also deducted tax at source. Loan have been duly repaid, some part has been repaid even in the present assessment year. In these circumstances, in our considered opinion assessee has discharged the onus. AO has not brought on record any cogent material to make the addition as unproved cash credit. Hence, the addition made by the assessing officer is not sustainable. No infirmity in the order of Ld.CIT(A) regarding deletion of addition on account of loan. Accordingly, we are uphold the same. Addition on account of deduction claimed by the assessee for interest payment on unexplained unsecured loan from dubious lenders - Since, we have already held that addition of loan as unexplained credit is not sustainable, the disallowances of interest thereon, on the same reasoning is liable to be deleted. Hence, we uphold the order of the Ld.CIT(A) on the issue also. Revenue appeal dismissed.
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