DCIT Vs M/s. Karthik Construction Co. (ITAT Mumbai)
Addition U/s. 69A can only be made when assessee found to be in possession of money bullion jewellery, etc., not recorded in his books of account
The Mumbai Bench of the Income Tax Appellate Tribunal considered the Revenue’s appeal against the order of the Commissioner (Appeals)-44, Mumbai, for Assessment Year 2011-12. The sole issue was whether the Commissioner (Appeals) was justified in deleting an addition of ₹80,71,317 made under Section 69A of the Income-tax Act, 1961 in respect of repayment of unsecured loans. The Revenue contended that the assessee had routed its own money through unsecured loans and, after repayment, the money was transferred or withdrawn by the assessee.
The assessee, a partnership firm engaged in the business of builders and developers, filed its return of income declaring total income of ₹39,84,250. During the assessment proceedings, the Assessing Officer noticed substantial repayments of old unsecured loans during the relevant previous year and called upon the assessee to furnish details of the loans that had been squared up along with their duration. On verification, the Assessing Officer found that the unsecured loans had been obtained prior to the financial year 2005 and were repaid during the relevant year.
