DCIT Vs Vaishnodevi Buildcon Private Limited (ITAT Kolkata)
Suspicion Isn’t Evidence – Documentary Proof Triumphs Over Doubt – ITAT Kolkata Upholds ₹2.5 Cr Loan as Genuine, Deletes Additions u/s 68 & 69C
AO reopened the Assessee’s assessment u/s 147 based on information from the Investigation Wing alleging that M/s Shivaangan Merchandise Pvt. Ltd., from which Assessee had taken an unsecured loan of ₹2.50 crore, was a shell or struck-off company. Despite the Assessee furnishing confirmations, ITRs, audited financials, & bank statements of the lender along with proof of TDS on interest paid, AO treated the amount as unexplained cash credit u/s 68 & added the interest payment of ₹8.46 lakh as unexplained expenditure u/s 69C. CIT(A)/NFAC, after verifying all evidences, deleted both additions, holding that the lender company was active on the MCA portal, had filed its returns, paid due taxes of ₹23.94 lakh, possessed a net worth exceeding ₹51 crore, & had been assessed u/s 143(3) for the same year. AO had merely relied on the Investigation Wing report without conducting any independent verification.
ITAT observed that Assessee had produced complete documentary evidence establishing the identity, creditworthiness, & genuineness of the loan transaction, including audited accounts, confirmations, ITR acknowledgments, & bank statements. AO failed to undertake any inquiry or bring adverse material on record to rebut these evidences. Tribunal emphasized that suspicion cannot substitute evidence, & once the primary onus is discharged by the Assessee, the burden shifts to the Revenue to disprove it through concrete inquiry. CIT(A)’s detailed findings, based on verification of factual & financial data, were consistent with the law laid down in PCIT v. Sreeleathers (Cal HC, ITAT No. 18/2022, dated 14.02.2022) & ITO v. Megasun Merchants Pvt. Ltd. (ITA No. 1038/KOL/2015, dated 29.03.2019).
