Addition unsustainable as three ingredients engraved in section 68 proved

Bansal Separators and Spares Pvt Ltd Vs ITO (ITAT Mumbai)

ITAT Mumbai held that addition unsustainable as assessee has proved the three ingredients engraved in section 68 of the Act and proved the satisfactory nature of the loan transactions. On the otherhand, AO has not brought any contrary material to show that loan received is bogus or accommodation entries.

Facts- Assessee is engaged in the business of Trader of Machinery and Machinery Parts. During the assessment proceedings the Assessing Officer observed that assessee has received unsecured loans from various parties.

Based on the informations submitted by the parties Assessing Officer observed from the financial statements that all these parties have meagre income and not provided the completed details as asked by the Assessing Officer and with regard to other parties who has not responded to the notices u/s. 133(6) of the Act, Assessing Officer observed that these notices were returned back and it shows that these parties are not in existence and further, he observed that even assessee has not submitted the relevant information specified in notices issued to them. Therefore, he came to the conclusion that the assessee has not established the identity, creditworthiness and genuineness of the transactions.

CIT(A) considered the issue and decided the issue in favour of the assessee. Being aggrieved, the present appeal is filed by the revenue.

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