Prodigy Infomatics Private Limited Director Vs ITO (ITAT Mumbai)
In this case, the assessee challenged addition of ₹14.37 lakh u/s 68 towards unsecured loans and disallowance of interest of ₹82,110. The AO had made the addition on the ground that the assessee failed to furnish confirmations and supporting evidence to establish identity, creditworthiness and genuineness of the loan creditors.
Before CIT(A), the assessee filed additional evidences including confirmations and bank statements, which were admitted in absence of remand report from AO. However, on examination, CIT(A) found that the confirmations were defective—some lacked PAN, some were signed without clarity on capacity, and supporting documents such as creditors’ bank statements and ITRs were not furnished. Accordingly, CIT(A) held that primary onus was not discharged and confirmed the addition.
Before ITAT, there was no representation from the assessee. Tribunal observed that the assessee failed to establish all three essential ingredients of section 68—identity, creditworthiness and genuineness. It reiterated that initial burden lies on the assessee and cannot be shifted to AO unless prima facie evidence is furnished.
Since no new material was placed to rebut findings of CIT(A), ITAT upheld the addition u/s 68 and consequential disallowance of interest.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present appeal has been filed by the assessee challenging the impugned order 18.02.2025 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2012-13. The following grounds are reproduced below:
“1. On the facts and in the circumstances of the case and in law, the learned C.I.T. (A) erred in dismissing the appeal.
2. On the facts and in the circumstances of the case and in law, the learned C.I.T. (A) erred in dismissing the appeal and that too without appreciating fully and properly the facts of the case.
3. On the facts and in the circumstances of the case and in law, the learned C.I.T. (A) erred in confirming the action of the learned A.O. in making an addition of an amount of Rs. 14,37,000/- u/s 68 of the act.
4. On the facts and in the circumstances of the case and in law, the learned C.I.T. (A) erred in confirming the action of the learned A.O. in making an addition of an amount of Rs.82,110/- by disallowing interest paid on unsecured loans.”
2. At the very outset, we noticed that none appeared on behalf of the assessee when the case was called out repeatedly. On going through the case files, we found that on earlier occasions the assessee had sought adjournment, but even in spite of that, today nobody appeared.
