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2024 (1) TMI 218 - DELHI HIGH COURTAddition u/s 68 - AO doubted the genuineness of the loan transaction and hence added the amount to the income of the appellant/assessee - loan agreement is titled “unsecured term loan agreement” - HELD THAT:- According to us, the loan agreement entered into by the appellant/assessee with the lender i.e., GWPL, raises more questions than answers as to what was the reality. Strangely, this agreement did not impose any burden on the appellant assessee i.e., the borrower, with regard to interest. The loan, apparently, could be repaid after four years in three annual installments, albeit on mutually agreed terms. Since the lender was a private limited company, it was perhaps open to the appellant/assessee i.e., the borrower, to produce the erstwhile directors to establish the genuineness of the loan agreement. None of these steps were taken by the appellant/assessee. Appellant/assessee, on the other hand, tried to shift the onus onto the respondent/revenue. The submission that the AO should have issued notices to the lender i.e., GWPL does not impress us. The reason being that if the appellant/assessee was unable to produce the requisite material since the lender i.e., GWPL had been struck off from the Register of Companies, it would have been equally futile if notices had been issued by the AO. In any event, in our opinion, the initial onus was not discharged by the appellant/assessee. Besides this, the argument advanced that since there was remission of liability Section 41(1) of the Act would apply and not the provisions of Section 68 of the Act, as rightly held by the Tribunal, is an untenable submission. Since the genuineness of the loan transaction was doubted, no liability, in law, fructified requiring remission. Decided against assessee.
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