DCIT Vs Eskag Sanjeevani Pvt. Ltd. (ITAT Kolkata)
Unsecured loans not bogus – ITAT Kolkata upholds deletion of ₹ 4.04 Cr u/s 68 & interest addition- Full documentation saves ₹ 4 Cr loan – Repayment through banking channels proves genuineness – Shell-company theory rejected – Burden shifts to AO after assessee’s proof – Reopening based on old statement struck down
Revenue filed appeals against CIT(A)’s order dated 28.05.2024 deleting an addition of ₹ 4,04,50,000 made u/s 68 towards unsecured loans taken from Asha Apartments Pvt Ltd & ₹ 31.27 lakh interest thereon.
A search was conducted on 05.02.2021 on the Eskag Healthcare Group, in which Assessee company was a related entity. During A.Y. 2019-20 Assessee had received ₹ 4.04 Cr as unsecured loan from Asha Apartments Pvt Ltd & paid ₹ 31.27 lakh interest. AO held that the lender had negligible income & no real credit-worthiness; notice u/s 133(6) was unanswered; & relying on the Manohar Lal Nangalia investigation statement (2014) treating the lender as a shell entity, AO treated the loan & interest as unexplained credits u/s 68.
CIT(A) deleted both additions after noting that Assessee had filed:
– PAN, confirmation, audited accounts, MCA data, ITR copies, & bank statements of the lender;
– ledger accounts showing loan receipt & repayments through banking channels; &
– evidence that the entire loan was repaid in later years (FY 2023-24).
CIT(A) found that AO had not disproved these documents nor shown any fund-flow evidencing that the money originated from Assessee. The statement of 2014 could not taint the 2018-19 transaction. Relying on Iris Clothings Ltd v. DCIT (ITA 1015/Kol/2023), PCIT v. Sreeleathers (143 Taxmann.com 435 Cal HC), & PCIT v. Ambe Tradecorp (P) Ltd (145 Taxmann.com 27 Guj HC), he held that once identity, credit-worthiness & genuineness were evidenced & the loan repaid, no addition u/s 68 could stand.
