Case Law Details
ACIT Vs Harvansh P. Chawla (ITAT Delhi)
Facts- Based on the email from Mr. Michael Boettcher, AO alleged undisclosed income of $7,000,000 (i.e., INR 28,00,00,000. Unsecured loan was received by the Assessee from various parties and the addition was made by the AO treating the same as unexplained income.
Conclusion-
Undisclosed income – it is concluded that there is no liabilities on the part of the assessee and the revenue could not bring about any cogent material to prove the allegations.
Unsecured loan– It is seen that merely because the Lender Company had substantial funds through borrowings, AO suspected the Assessee to have created layers of intermediaries to bring in Unaccounted money, and on the basis of such suspicion, drew adverse conclusion against the genuineness of the Unsecured Loan and treated it as Unexplained merely on the basis of such suspicion. In fact, though the Confirmation from that party was filed, the Assessment Order has not acknowledged the same. No doubt, AO can have suspicion regarding a particular transaction or group of transactions, but such suspicion can only be a ground for further Investigation to determine the true facts, but it cannot be a ground for adverse conclusion against the Assessee. In view of the entire facts of the case, there is no justification to treat the Unsecured Loan as Unexplained, and hence the addition made by the AO treating this Loan as Unexplained is hereby deleted.
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