ACIT Vs Paswara Papers Ltd. (ITAT Delhi)
Identity, Creditworthiness & Genuineness Proved – Unsecured Loans Backed by Evidence, Addition Falls Flat
Delhi ITAT dismissed Revenue’s appeal against CIT(A)’s order deleting addition of ₹3.51 crore made u/s 68 towards unsecured loans & share capital received by Paswara Papers Ltd.
Assessee filed return of income at ₹40,02,840/-. Case was selected for scrutiny & AO completed assessment u/s 143(3) on 31.12.2018 by making addition of ₹3,51,65,500/- in respect of unsecured loans & share capital from: Envee Infrastructure Pvt. Ltd. – ₹2,50,00,000, Arvind Kumar HUF – ₹30,68,500, Vinod Kumar HUF – ₹10,28,500 & Kapil Kumar HUF – ₹60,68,500.
AO alleged lack of creditworthiness & failure to produce directors of lending company & questioned cash deposits in HUF accounts.
Assessee submitted confirmations, ITRs, bank statements, audited balance sheets, shareholding patterns & other documents of lenders, proving identity, creditworthiness & genuineness of transactions. It was argued that: No cash deposits were made before loans were advanced. Transactions were routed through banking channels & reflected in audited accounts. AO made no independent enquiry u/s 131/133(6). In earlier year (AY 2015-16), AO had accepted genuineness of HUF transactions.
CIT(A) deleted the entire addition holding that Assessee had discharged its onus u/s 68 by producing all necessary evidence. AO’s observations were based only on surmises without conducting proper enquiry.
