Nirbhay Consultants Pvt. Ltd. Vs ITO (ITAT Ahmedabad)
Loan received Held Genuine & Used for Business Repayment – ITAT Ahmedabad Deletes ₹1.02 Cr Addition
Assessee appealed against the order of CIT(A), NFAC confirming addition of ₹1,02,15,000/- u/s 68 on account of loan received from Fiducia Infrastructure Pvt. Ltd.. AO, based on information from the Investigation Wing, Kolkata, observed that funds were routed through Gotil Properties Pvt. Ltd. & Talent Real Estate Pvt. Ltd. before being credited to Assessee. AO treated the loan as accommodation entry & made addition u/s 68.
Before Tribunal, Assessee submitted that the loan from Fiducia Infrastructure Pvt. Ltd. was genuine, recorded in audited accounts, reflected in bank statements, & subsequently repaid in F.Y. 2018-19. It was further argued that the amount was borrowed for repayment of a business loan from Nirbhay Capital Services Pvt. Ltd., & that Department had already reopened assessment in the hands of Fiducia Infrastructure Pvt. Ltd. for the same transaction, establishing its genuineness.
Tribunal noted that CIT(A) had himself recorded that the loan from Fiducia Infrastructure Pvt. Ltd. was used for repayment to Nirbhay Capital Services Pvt. Ltd., as evidenced by ledger entries. Holding that the nexus & business purpose were duly proved, ITAT found the addition unsustainable. Bench observed that both AO & CIT(A) ignored material facts demonstrating that the transaction was genuine & through banking channels.
