ITO Vs Savla Associates (ITAT Mumbai)
ITAT Mumbai Upholds Deletion of ₹5.54 Crore Section 68 Addition on Unsecured Loans
The Mumbai ITAT dismissed the Revenue’s appeal and upheld the NFAC’s order deleting an addition of ₹5.54 crore made under section 68 on account of unsecured loans received by the assessee, a partnership firm engaged in real estate development. The Assessing Officer had treated loans from 37 creditors as unexplained, alleging failure to establish identity, creditworthiness, and genuineness, and pointing to cash deposits in creditors’ bank accounts prior to advancing loans.
The Tribunal noted that during appellate proceedings the assessee furnished comprehensive, party-wise documentary evidence, including loan confirmations, creditors’ bank statements, and income-tax returns. It found that the loans were routed through banking channels and that sufficient funds were available in the creditors’ accounts before advancing the loans. While observing that the first appellate authority’s reasoning was brief, the ITAT held that the factual record clearly demonstrated discharge of the assessee’s onus under section 68. Given the nature of the assessee’s business and the evidences on record, the Tribunal found no infirmity in the deletion of the addition and accordingly dismissed the Revenue’s appeal.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
