Uma Strips Limited Vs ACIT (ITAT Delhi)
₹18 Cr Group Loans & Purchase Disallowance Sent Back: Delhi ITAT Grants Relief on Trade Creditors, Orders Fresh Probe
Delhi ITAT partly allowed the Assessee’s appeal, holding that additions on account of unsecured loans and purchase disallowance were made without proper examination and violation of natural justice, while deleting the addition of ₹1.13 crore towards trade creditors u/s 68.
The AO had made multiple additions:
(i) ₹17.99 crore u/s 68 treating unsecured loans from group entities as unexplained, relying on Investigation Wing inputs alleging hawala links;
(ii) ₹1.13 crore u/s 68 towards sundry creditors; and
(iii) 20% disallowance of purchases amounting to ₹3.41 crore on the ground of non-verification.
The Tribunal noted that the Assessee had furnished confirmations, ITRs, audited financials and bank statements of the lender entities, including loans routed through overdraft facilities of a group concern, which were not properly examined by the AO or the CIT(A). Further, the Investigation Wing report was not confronted to the Assessee, vitiating the additions on loans and purchases.
Accordingly, the ITAT set aside the additions relating to unsecured loans and purchase disallowance to the file of the AO for de-novo adjudication after granting due opportunity and sharing the Investigation Wing material.
On the issue of trade creditors, the Tribunal found that liabilities arose from MoUs with family members for MCX commodity trading, and merely because replies emanated from common email IDs or addresses, addition u/s 68 could not be sustained. The AO was therefore directed to delete the ₹1.13 crore addition.
The ground relating to taxation u/s 115BBE was held to be academic.
Result:
