Interest payment on cash loan covered u/s 69C as unexplained expenditure

Shyam Sundar Dhanuka Vs Union of India (Calcutta High Court)

Held that payment of interest on cash loan falls within the ambit of unexplained expenditure within the meaning of Section 69C of the Income Tax Act.

Facts- The appellant filed the present writ petition challenging the order passed by the first respondent u/s. 148A(d) of the Income Tax Act, 1961 and the consequential notice issued u/s. 148 of the Act.

AO has held that the appellant assessee has availed cash loan to the tune of Rs. 40,70,00,000/- through finance broker Kaseras, other different lenders and it has also been recorded. There is huge unexplained expenditure within the meaning of Section 69C of the Act and that the cash loan and repayment in cash comes within the crux of the provisions of Section 269SS and Section 269T and other relevant provisions of the Act.

Conclusion- Held that the name of the assessee appears in the seized documents having borrowed Rs. 40,70,00,000/- on a “rukka” and the amount so borrowed is deemed to be income of the assessee and the interest paid by the assessee to the lender is deemed to be unexplained expenditure and the income generated from the application of the loan so taken as unexplained income.

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