J. K. Global Vs ITO (ITAT Mumbai)
The assessee filed three appeals before the ITAT Mumbai against separate orders of the National Faceless Appeal Centre (NFAC) dated 25.07.2023 relating to Assessment Years 2010-11, 2011-12 and 2012-13. Since the issues involved were identical, the Tribunal disposed of all the appeals by a common order. The common dispute related to additions made under Section 68 of the Income Tax Act in respect of unsecured loans and the corresponding disallowance of interest paid on such loans.
For AY 2010-11, the assessee had received an unsecured loan of ₹25 lakh from Ryan International; for AY 2011-12, ₹5 lakh from Casper Enterprises Pvt. Ltd.; and for AY 2012-13, ₹20 lakh from Duke Business Pvt. Ltd. The Assessing Officer treated these loans as unexplained cash credits under Section 68 based on information received from the Directorate General of Income Tax (Investigation), Mumbai. The information indicated that Pravin Kumar Jain operated a network of paper concerns engaged in providing accommodation entries in the form of bogus unsecured loans, bogus share application money and similar transactions, and that the assessee was one of the beneficiaries. The statement of Pravin Kumar Jain recorded under Section 132(4) admitted that the concerns under his control were paper companies with no genuine business activities and that they were engaged in providing accommodation entries.
