Divya Enterprises Vs ITO (ITAT Delhi)
The Income Tax Appellate Tribunal Delhi restored to the Assessing Officer the issue relating to unsecured loans of ₹1.60 crore received from Odisha Finlease Pvt. Ltd. and related interest disallowances after finding that the assessee had furnished some supporting documents and deserved another opportunity to establish the genuineness of the transaction under Section 68 of the Income Tax Act.
The appeals arose from reassessment proceedings for Assessment Years 2018-19 and 2019-20. The reassessment was initiated after a search in the case of KK Spun India Limited, during which the Investigation Wing alleged that Aditya Jain operated accommodation entry entities and provided bogus unsecured loans through dummy companies. Odisha Finlease Pvt. Ltd. was identified as one such entity allegedly controlled by him. The Assessing Officer noted that the assessee had received unsecured loans of ₹1.60 crore from Odisha Finlease Pvt. Ltd. during FY 2017-18.
The assessee contended that it was a partnership firm engaged in trading stainless steel sheets and utensils and that the loans were genuine transactions received through banking channels. It submitted that the loans were reflected in audited books, interest was paid after deduction of TDS, and the entire loan was repaid in the subsequent financial year. The assessee also challenged the reassessment proceedings on the ground that complete material relied upon by the Assessing Officer was not supplied and no opportunity for cross-examination of Aditya Jain was provided despite specific requests.
