ACIT Vs Kind Building Solutions Private Limited (ITAT Delhi)
No Section 68 Addition Where Assessee Proved Identity, Creditworthiness and Genuineness of Loans: ITAT; ITAT Upholds Deletion of ₹14.20 Crore Addition Because AO Conducted No Independent Inquiry; Loan Addition Quashed Because Revenue Produced No Evidence Linking Assessee to Accommodation Entries: ITAT; Section 68 Addition Cannot Rest on General Allegations Against Lenders, Rules ITAT.
The Revenue filed an appeal against the order dated 30.08.2024 passed by the National Faceless Appeal Centre (NFAC) for Assessment Year 2015-16. The dispute related to the deletion of an addition of ₹14.20 crore made under Section 68 of the Income Tax Act, 1961 on account of alleged unexplained cash credits.
The assessee had filed its return declaring a loss of ₹1,57,97,650. The case was selected for limited scrutiny under CASS on various issues, including large squared-up loans during the year, real estate business with high closing stock, mismatch in payments to related persons, and property transactions reported in Form 26QB.
During the assessment proceedings, the Assessing Officer (AO) found that the assessee had received loans from two companies, namely Mekaster Finlease Ltd. and RKG Finvest Ltd., amounting to ₹11 crore and ₹3.20 crore respectively. These loans were received and repaid during the same year.
