ACIT Vs Narayan Dalpatram Thakkar (ITAT Mumbai)
Alleged Bogus Loan Deletion Upheld: ITAT Confirms Genuineness of Loans with Full Documentation; Investigation Report Overruled: ITAT Deletes ₹65 Lakh Addition Due to Lack of Independent AO Verification; Unsecured Loans Genuine: ITAT Confirms Deletion of Section 68 Addition as Lenders Were Active Assessees; Interest Disallowance Removed: ITAT Deletes ₹69C Addition Consequential to Genuine Loan Finding; Loan from Alleged Entry Providers Found Genuine – ITAT Mumbai Deletes ₹65 Lakh Addition Based on Praveen Kumar Jain Group Report
Revenue appealed against CIT(A)’s order deleting addition of ₹65 lakh u/s 68 & ₹87,547 u/s 69C towards alleged bogus loans & interest, based on information from Investigation Wing, Mumbai, alleging the lenders were Praveen Kumar Jain group entities providing accommodation entries.
AO reopened assessment & treated loans from Olive Overseas Pvt. Ltd. (₹30 lakh) & Triangular Infocom Pvt. Ltd. (₹35 lakh) as non-genuine. CIT(A) found that Assessee had produced loan confirmations, bank statements, audited ITRs, repayment proofs, affidavits & established identity, creditworthiness & genuineness of lenders.
Before ITAT, Revenue argued that CIT(A) ignored investigation findings. However, Tribunal noted that AO:
- Relied solely on Investigation Wing report without independent verification;
- Denied Assessee’s request for cross-examination of Praveen Kumar Jain; and
- Failed to show any nexus between Assessee & the Jain group.
The lenders’ bank accounts showed no cash deposits before or after issuing cheques, loans were repaid through banks, & both entities were active companies filing returns & audited financials.
