DCIT Vs Paramount Propbuild Pvt. Ltd. (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, dismissed the Revenue’s appeal and upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)] deleting the addition of ₹6.25 crore made under Section 68 of the Income Tax Act on account of unsecured loans received by the assessee from four lender companies.
The case arose from a search and seizure operation conducted under Section 132 in the Paramount, Gulshan and Ajnara Group on 11 March 2011. During the assessment proceedings for Assessment Year 2011-12, the Assessing Officer (AO) made an addition of ₹6.25 crore under Section 68, alleging that the assessee had failed to establish the identity of the lenders, the genuineness of the loan transactions, and the creditworthiness of the four lending companies. The AO also noted that summons issued to the lenders were returned unserved.
Before the CIT(A), the assessee filed additional evidence under Rule 46A, explaining that sufficient opportunity had not been provided during assessment proceedings. The documents included copies of the lenders’ PAN cards, confirmations, income tax returns, audited financial statements, Memorandum of Association, certificates of incorporation, board resolutions, loan sanction letters, foreclosure letters, and bank statements. The CIT(A) forwarded these documents to the AO for comments on both admissibility and merits. While the AO objected to the admission of the additional evidence, no adverse comments were made on the merits or authenticity of the documents in the remand report. The CIT(A) therefore admitted the evidence and proceeded to examine the transactions.
