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2021 (7) TMI 1100 - AT - Income TaxRevision u/s 263 - addition on account of interest paid to loan creditors - Addition u/s 68 treating the same as unexplained and non-genuine - CIT observed that when loan deposits were found to be non-genuine, remained unexplained and added the same to the total income of the assessee, then there would not be any question allowing the alleged interest expenditure thereon - HELD THAT:- Addition made by the AO under section 68 on the loan taken by the assessee treating the same as unexplained and non-genuine has not been disputed before us by the assessee, nor the issue of addition was contested by the assessee further on merit - we are of the view that the reason for invocation of revisionary power by the ld.CIT is obvious and specific because there is an inherent lack of examination/verification of the record at the end of the AO while finalizing the assessment. On one hand,AO is treating the alleged loan deposits as non-genuine and adding the same to the income under section 68 of the Act, but on other hand, without proper verification, allowed the interest payment allegedly made to the loan depositors, that would render the assessment order erroneous and prejudicial to the interest of the Revenue. Interest paid to creditors against unsecured loans is allowable only when loan deposited by the creditor with the assessee are established. Therefore, the conclusion of the AO while finalizing the assessment is contradictory in itself, which render the assessment order erroneous and prejudicial to the interests of the Revenue. CIT is therefore justified in exercise of his power under section 263, which we uphold and the ground of appeal of the assessee is dismissed.
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