Maruti Multichem Pvt. Ltd. Vs DCIT (ITAT Ahmedabad)
The reassessment was triggered on the allegation that Assessee received a bogus loan of ₹50,00,000 from Dishman Pharmaceuticals & Chemicals Ltd. (DPCL). AO treated the amount as unexplained cash credit u/s 68, taxed it u/s 115BBE, & ignored Assessee’s explanations.
Before CIT(A), the assessee produced:
– Confirmation from DPCL,
– Ledger accounts,
– Bank statements showing loan received through banking channels,
– Interest paid with full TDS compliance,
– Proof of full repayment of the loan in January 2019.
CIT(A) still upheld the addition without considering these evidences.
Tribunal examined the records & found it an undisputed fact that the loan was received & repaid through proper banking channels & the lender’s creditworthiness was not in doubt. Relying on binding Gujarat High Court rulings (Ayachi Chandrashekhar Narsangji & Ambe Tradecorp Pvt. Ltd.), ITAT held that when a loan is fully repaid & evidenced, addition u/s 68 cannot survive. AO also failed to issue even a basic verification notice u/s 133(6).
Held: The loan was genuine, interest was duly subjected to TDS, & the entire amount was repaid; therefore, the Section 68 addition is unsustainable.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
