Rachna Kirti Doshi Vs ITO (ITAT Mumbai)
Sec 68 Addition Set Aside – Documentary Evidence Accepted; Matter Remanded for Loan Repayment Verification
Assessee faced addition of ₹17.50 lakh u/s 68 on account of alleged bogus unsecured loans based on information from Investigation Wing (survey in case of third party). AO relied on loose papers and external report to treat loans as accommodation entries. CIT(A) partly confirmed addition.
Before ITAT, assessee demonstrated that loans were taken from identified parties and furnished complete documentary evidence including loan confirmations, PAN details, bank statements and ITRs of lenders. In some cases, lenders also responded to notices u/s 133(6). It was further shown (as seen in repayment table on page 5) that loans had already been repaid through banking channels.
ITAT held that:
- Assessee had discharged onus u/s 68 by proving identity, genuineness & creditworthiness
- AO made addition solely based on investigation report without independent enquiry
- No evidence of cash trail or accommodation entry mechanism
- Statement of alleged entry provider was not provided → violation of natural justice
However, Tribunal noted that verification of actual repayment of loans was necessary.
Accordingly:
- Matter remanded to AO only for verifying repayment
- If repayment found genuine → addition to be deleted.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
