Global Stainless Vs ACIT (ITAT Delhi)
Core Issue: The core issue involved was whether unsecured loans treated as bogus under Section 68 can be accepted as genuine merely because they were routed through banking channels and subsequently repaid, and whether the assessee had discharged the onus of proving identity, creditworthiness, and genuineness of the creditors.
Facts :- The assessee, engaged in business, filed its return declaring income of ₹28.60 lakh. During the year, it had recorded unsecured loans aggregating to ₹5.91 crore from two parties, namely M/s Steel Impex (₹3.33 crore approx.) and M/s Cloud Zone (₹2.58 crore approx.). These loans were claimed to have been received and repaid within the same financial year through banking channels.
The case was selected for scrutiny under CASS specifically on the issue of unsecured loans. During assessment proceedings, the AO required the assessee to furnish complete details including confirmations, PAN, bank statements, and other supporting evidences to establish the nature and source of the credits.
The assessee contended that it had submitted confirmations, PAN, addresses, email IDs, and bank statements on 27.03.2021 and 30.03.2021, just prior to completion of assessment. It was further explained that in the case of M/s Steel Impex, being a proprietorship concern, the PAN provided belonged to its proprietor, and confusion arose due to two entities having similar names, resulting in accounting errors.
