DCIT Vs Tirupati Developers (ITAT Mumbai)
ITAT Mumbai held that addition under section 68 towards unsecured loans merely relying on retracted statement cannot be sustained. Accordingly, order of CIT(A) upheld and appeal of revenue is dismissed.
Facts- The assessee had filed its return declaring nil income for AY 2012-13 on 28.09.2012. The assessee firm is a part of the ‘Lotus Group’, on which a search action was carried out u/s 132. On the basis of information found during the course of the search, a notice u/s 153A was issued on 08.02.2016 requiring the assessee to furnish its return of income. The assessee again filed the return declaring nil income on 18.04.2016. The assessment was completed u/s 153A r.w.s. 143(3) of the Act at an income of Rs. 7,44,28,290/- after making an addition on account of unsecured loan of Rs. 6,93,00,000/- u/s 68 of the Act and disallowance of interest paid thereon to the tune of Rs. 51,95,330/-.
CIT(A) allowed the appeal of the assessee. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that the Ld. CIT(A) has examined the impugned loan transaction in detail and has allowed relief to the assessee on sound reasoning as reproduced in Para 7 hereinabove. Moreover, under similar facts and circumstances, the coordinate bench has allowed relief on account of similar loan transactions with M/s. Satyam Projects Ltd. in the case of M/s. Lotus Logistics & Developers Pvt. Ltd. Under these facts and circumstances, we are of the view that the decision of the Ld. CIT(A) is based on merits and does not call for any interference. Accordingly, revenue’s appeal on this issue is dismissed.
