DCIT Vs Vivek Gupta (ITAT Kolkata)
Kolkata Bench of ITAT dismissed Revenue’s appeals & upheld CIT(A)’s deletion of additions u/s 68, disallowance of interest & alleged commission on loans.
AO had treated ₹1.67 crore received from 10 entities as unexplained cash credits, relying on a statement recorded during survey u/s 133A, where Assessee allegedly admitted to taking accommodation entries. Assessee later retracted the statement, claiming it was obtained under duress, & produced full evidences-confirmations, PAN, bank statements, ITRs, & proof of repayment with interest. CIT(A) noted that the loans totalling ₹2.23 crore were repaid in subsequent years with TDS on interest, hence no addition could be sustained.
Tribunal agreed that statements recorded during survey have no evidentiary value unless corroborated by material evidence, relying on CIT v. S. Khader Khan Son (300 ITR 157, Mad HC) affirmed by SC. It also cited CBDT Circular No. 286/2/2003 warning against forced confessions. The Bench observed that AO had acted mechanically without disproving the documentation or repayment. Referring to group case DCIT v. Avima Exports Pvt Ltd (ITA Nos. 179 & 180/Kol/2024), the Tribunal reaffirmed that loans duly repaid with interest & supported by evidence cannot be treated as bogus merely on suspicion.
