Nyalkaran Builders LLP Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that addition towards unsecured loan where loan was repaid is unsustainable, whereas, addition where assessee failed to demonstrate repayment or interest payment to creditor sustained.
Facts- The assessee is a Limited Liability Partnership Firm (LLP) engaged in the business of construction and development activities. The return of the assessee was taken-up for scrutiny assessment since it was found large increase in unsecured loans, availed by the assessee. After verification, AO confirmed the unsecured loans relating to the 5 parties amounting to Rs.1,30,45,000/-. CIT(A) confirmed the addition. Being aggrieved, the present appeal is filed.
Conclusion- Held that CIT(A), without making any comments on the repayment of loan by the assessee, but merely relying upon the creditworthiness of the creditors, confirmed the addition made by the Assessing Officer. Thus, the addition sustained by the ld. CIT(A) is not correct in law, in a case where repayment of loan made within the same assessment year – that too within a period of 10 days. However, even before us, the assessee has not shown the loan availed from Pravinbhai Nanjibhai Golaviya HUF of Rs.7,25,000/- and the details about the repayment or interest to the creditor. In the absence of the same, the addition made on this account is liable to be sustained. Similarly, in the case of Shreeji Developers, there is a closing balance of Rs.12,50,000/-which is not being explained properly. Thus, the above additions are to be upheld.
