Falguni Nevatia Vs ITO (ITAT Kolkata)
Section 69A Not Applicable to Duly Recorded Unsecured Loans Supported by Confirmations- ITAT Kolkata Deletes ₹1.86 Cr Addition —
Assessee filed appeal against the order of CIT(A), NFAC, upholding the addition of ₹1.86 crore made by AO as unexplained money u/s 69A in respect of unsecured loans received from 14 private limited companies.
Assessee had furnished complete details before the AO, including PAN, addresses, ITR acknowledgments, audited financials, confirmations, & bank statements of all lenders. AO had also issued notices u/s 133(6) & 131, which were duly complied with by the creditors, confirming the loan transactions. However, the AO treated the entire amount as unexplained money u/s 69A, alleging lack of satisfactory explanation.
Tribunal observed that section 69A applies only to unexplained money, bullion, or valuable articles, not to unsecured loans recorded in books of account. Since the loans were duly accounted for & supported by confirmations & verifiable evidence, invocation of section 69A was wholly misplaced. The Bench criticized both the AO & CIT(A) for ignoring the compliance by loan creditors & held that once the Assessee discharged the primary onus, the burden shifted to the Department. No adverse material was found against any lender.
