The Tribunal ruled that loans from salaried relatives with disclosed income and banking trails satisfy identity, creditworthiness and genuineness. The Section 68 addition was therefore unsustainable.
ITAT Mumbai held that where segmental accounts are not available, then proportionate adjustments have to be made only in respect of the international transactions with associated enterprises [AE]. Thus, TPO directed to compute the transfer pricing [TP] adjustment, restricting it to the international transactions undertaken with associated enterprises.
The tax authorities made an addition without examining the lenders bank records. The Tribunal restored the matter to the AO to verify fund availability and absence of cash deposits.
The AO treated loans as unexplained due to incomplete confirmations. The Tribunal confirmed deletion after remand proceedings verified lenders’ identity, capacity, and transaction genuineness.
The reassessment was struck down because it relied exclusively on third-party search material. The ruling clarifies that section 153C, not section 147, must be invoked where incriminating evidence emerges from another persons search.
A Section 57(iii) interest claim was rejected solely due to the loan’s classification as a home loan. The tribunal held that if allowed earlier, the same view must prevail unless facts change.
The AO had treated all bank cash deposits as unexplained under section 69A. The Tribunal held that regular cash sales explained most deposits and restricted the addition to ₹10 lakh only.
The Tribunal held that a protective addition cannot be termed erroneous when the same income has already been assessed substantively in another case. The twin conditions of error and prejudice under section 263 were not satisfied.
The Tribunal ruled that when all statutory documents are on record and unchallenged, section 68 cannot be invoked. Suspicion cannot substitute proof in share capital cases.
The issue was whether reassessment could be initiated for an amount implicitly accepted in original assessment. The Tribunal ruled that reopening amounted to change of opinion and was legally unsustainable.
