Case Law Details
ITO Vs Rahul kantilal Shah (ITAT Mumbai)
ITAT Held that addition on the basis of the opening balance of unsecured loan treating the same as current year transaction by invoking section 68 of the Income Tax Act is unsustainable.
Facts-
The assessee was deriving income from profit and gains from partnership firm M/s. Sadguru Properties and M/s Sadguru and Krishna Developers and interest income is offered under the income from other sources. The A.O on perusal of the balance sheet as on 31-03-2012 found that the assessee has unsecured loans of Rs. 9,44,02,666/-. The AO has called for the details to substantiate the loan creditors with confirmations and supporting documents. The assessee has filed the loan confirmations, however the A.O found that they are not properly filed and does not have addresses and PAN of the concerned party. Therefore, the loan documents could not prove the genuineness of the transactions. Since the details are not filed with proper information. A.O. found that the loan confirmations to the extent of Rs.1,94,93,998/- in respect three groups were not filed and the assessee failed to prove the identity, genuineness and creditworthiness of the lenders and the interest on loan of Rs 14,17,828/-and made addition u/s 68 of the Act.
On the second disputed issue, the A.O. found that the assessee has disclosed loan obtained from the M/s Timestar Ltd and to test the genuineness of the transaction has issued notice u/s. 133(6) and the lender has denied about the loan transaction. The AO was not satisfied and no explanations were offered and made the addition of Rs.3,02,25,000/- and assessed the total income of Rs. 5,11,36,830/- and passed the order u/s 143(3) of the Act dated 31.03.2015.
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