ITO Vs Mundra Agencies Private Limited (ITAT Delhi)
Section 68 Deletion Upheld – Repayment of Loans with TDS Negates Accommodation Entry Allegation
The Delhi ITAT dismissed the Revenue’s appeal and upheld the deletion of addition of ₹2.07 crore made under Section 68 on account of alleged accommodation entries received by the assessee company. The Tribunal noted that the assessee had received loans from four entities and had fully repaid the loans along with interest after deducting TDS through banking channels, a fact not disputed by the Revenue. Relying on the Gujarat High Court decision in PCIT v. Ambe Tradecorp (P) Ltd., the Tribunal held that once repayment of loans is established through documentary evidence, credit entries cannot be examined in isolation ignoring corresponding debit entries in later years.
The Tribunal further observed that the assessee was not a beneficiary of any alleged entry arrangement and had furnished sufficient material to establish identity, creditworthiness and genuineness of transactions. The allegation of accommodation entries was held to be based only on presumptions without concrete evidence. Finding no infirmity in the order of the NFAC, the Tribunal dismissed the Revenue’s appeal and confirmed the deletion of the entire addition under Section 68.
FULL TEXT OF THE ORDER OF ITAT DELHI
