ITO Vs Aashna Developers Pvt. Ltd. (ITAT Ahmedabad)
ITAT Remands Section 68 Addition Because Lender’s Source of Funds Requires Fresh Verification; Unsecured Loan Addition Sent Back Because Repayment Through Banking Channels Was Not Independently Verified; ITAT Orders Fresh Examination Because Accommodation Entry Allegation Needs Detailed Fact Verification.
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, partly allowed the Department’s appeals for Assessment Years 2018-19 and 2022-23 for statistical purposes by setting aside the orders of the Commissioner of Income Tax (Appeals) and remanding the matter to the Assessing Officer for fresh examination of additions made under Section 68 of the Income Tax Act, 1961 relating to unsecured loans alleged to be accommodation entries.
For Assessment Year 2018-19, the assessee had received an unsecured loan of ₹1.25 crore from M/s. Madhudhan Barter Pvt. Ltd. The reassessment proceedings were initiated on the basis of information received through the Insight Portal alleging that the loan represented an accommodation entry routed through a company allegedly controlled by an entry operator. During reassessment proceedings, the assessee furnished confirmations, ledger accounts, bank statements, audited financial statements, income-tax returns, affidavits of the lender’s director, and details showing repayment of the loan through banking channels along with interest payments after deduction of tax at source. The assessee contended that the lender possessed sufficient financial capacity and that the transaction was genuine.
