Section 68 Addition Quashed as Loans Were Repaid Through Banking Channels: ITAT Ahmedabad

Prolife Industries Ltd. Vs ITO (ITAT Ahmedabad) In this case, the assessee company, engaged in the business of chemicals, challenged reassessment orders for Assessment Years 2016-17 and 2018-19 in which additions were made under Section 68 of the Income Tax Act on account of unsecured loans received from M/s. ANR Finance Limited and M/s. Kanungo Financiers Limited. The Assessing Officer treated the loans as accommodation entries allegedly linked to entities controlled by Jignesh Shah and Sanjay Shah and added the loan amounts as unexplained cash credits. Interest paid on such loans was also di...