ACIT Vs Yatindra Satish Pairaikar (ITAT Mumbai)
Section 68 Can’t Survive on Investigation Report Alone: Cheque Loans, Confirmations & Repayments Trump “Accommodation Entry” Tag
Revenue reopened assessments alleging that Assessee was beneficiary of bogus unsecured loans from M/s Naman Exports & M/s Meridian Gems, solely based on Investigation Wing report branding them as accommodation entry providers. AO, despite issuing notices u/s 133(6) & receiving confirmations, bank statements, audited accounts, ITRs & balance sheets of lenders, brushed aside all documentary evidence & treated cheque-based loans as unexplained cash credits u/s 68.
CIT(A) deleted additions after recording categorical findings that identity, creditworthiness & genuineness were fully proved. Loans were received through banking channels, confirmations were on record, repayments were also made through cheques in subsequent years, and nothing adverse emerged from independent enquiries.
ITAT Mumbai upheld CIT(A). Tribunal held that once Assessee discharges primary onus by furnishing confirmations, bank statements, audited financials & evidence of repayment, AO cannot make additions merely on conjectures & surmises by blindly relying on Investigation Wing report. Section 68 addition cannot rest on third-party allegations when direct evidence supports Assessee. Revenue appeals dismissed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The captioned appeals by the department arise out of two separate orders, passed by the learned Commissioner of Income Tax (Appeals), Mumbai (‘ld.CIT(A) for short), pertaining to the assessment years (A.Ys.) 2009-10 and 2010-11. Both the appeals involve common issue of deletion of additions made towards unexplained cash credit u/s. 68 of the Income Tax Act, 1961 (‘the Act’ for short).
