Somnath Cold Storage Vs ITO (ITAT Ahmedabad)
Section 68 Additions on Partner Capital and Loans Deleted; Identity, Creditworthiness and Genuineness Established – ITAT Ahmedabad
The Ahmedabad Bench of the ITAT allowed the appeal of the partnership firm and deleted additions of ₹2.52 crore towards partners’ capital and ₹31.30 lakh towards unsecured loans made under sections 68 and 69 for AY 2017-18.
Though the assessee remained unrepresented at the final hearing and repeated adjournments were rejected, the Tribunal examined the matter on merits. It noted that before the CIT(A), the assessee had furnished affidavits of partners, capital accounts, bank statements, land records (7/12 extracts), proof of agricultural income and income-tax returns of partners. Importantly, even the remand report did not dispute the identity, creditworthiness or genuineness of the partners or creditors, and one partner was specifically found to have sufficient creditworthiness.
The Tribunal held that once the three essential ingredients — identity, creditworthiness and genuineness — are not in dispute, the Assessing Officer cannot invoke section 68 merely on suspicion. It further observed that unsecured loan additions were already examined in remand proceedings and wrongly sustained.
Accordingly, the ITAT deleted the capital introduction and loan additions in full and allowed the appeal.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
This is an appeal filed against the order dated 06-03-2025 passed by National Faceless Appeal Centre(NFAC), Delhi for assessment year 2017-18.
