KTM Impex Private Limited Vs ITO (ITAT Delhi)
Repaid Loan Cannot Be Treated as Bogus: Delhi ITAT Deletes ₹50 Lakh Addition Based on Entry-Operator Information
The Delhi Bench of the ITAT allowed the appeal of KTM Impex Pvt. Ltd. (AY 2019-20) and deleted the addition of ₹50 lakh under section 68 along with interest disallowance of ₹5.45 lakh. The reassessment was initiated solely on Investigation Wing inputs alleging accommodation entries from an entity linked to an entry operator.
The Tribunal held that mere third-party information and suspicion cannot override documentary evidence. The assessee had received and repaid the unsecured loan through banking channels well before the issue of notice under section 148, and had furnished confirmations, PAN, bank statements, and audited financials of the lender—thereby discharging the onus of identity, creditworthiness, and genuineness.
Relying on its earlier coordinate-bench ruling, the ITAT emphasized that repaid loans with interest indicate genuine business transactions, and additions cannot be sustained merely because the lender was allegedly linked to an entry operator, without independent inquiry or granting cross-examination. Consequently, the reassessment additions were quashed and the appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. The assessee has filed appeal against the order of the Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT (A)”, for short] dated 11.03.2025 for the Assessment Year 2019-20.
