ITO Vs Mahavir Corporation (ITAT Surat)
ITAT Surat held that no addition with regard to closing balance of old loan can be made under section 68 of the Income Tax Act. Accordingly, addition u/s. 68 to that extend is liable to be deleted.
Facts- Case of the assessee was selected for scrutiny. Accordingly, AO treated unsecured loan of Rs. 4.96 crores as non-genuine and added under Section 68 of the Income tax Act, 1961.
CIT(A) confirmed the addition to the extent of Rs.1.42 crores and remaining addition of Rs.3.35 crores, which was closing balance of loans were deleted. Further aggrieved, the revenue has filed present appeal before the Tribunal.
Conclusion- Held that the main contention of assessee was that the loan of Rs. 3.53 crores represent the old balance which is also reflected in the audited balance sheet and no addition with regard to closing balance of old loan can be made under Section 68 of the Act in the assessment order under consideration. We find that ld CIT(A) on verification of the basic facts that majority of the loan was received in earlier years, so no addition can be made in this assessment year (AY 2015- 16). Before us no contrary facts or law is brought to our notice to take other view that the loan which was accepted in earlier years and were reflected in the audited accounts in those assessment years and no adverse view was taken in such assessment years, thereby accepting the transaction in such years, can be added in the year under consideration. In view of the aforesaid factual discussion, we do not find any reason to interfere with the finding of ld. CIT(A) in deleting the addition of Rs. 3.53 crores which we affirm.
