ACIT Vs 21st Century E-Solutions Pvt. Ltd. (ITAT Delhi)
Section 68 Addition on Unsecured Loans Deleted After Rule 46A Evidence: ITAT Delhi Upholds CIT(A)
The Delhi Bench of the ITAT dismissed the Revenue’s appeal and upheld the deletion of an addition of ₹3.75 crore made under section 68 on account of unsecured loans. The Assessing Officer had treated loans received from five parties as unexplained on the ground that the assessee failed to establish the creditworthiness of lenders and genuineness of transactions during assessment proceedings.
Before the CIT(A), the assessee explained that adequate opportunity was not granted at the assessment stage and filed additional evidence under Rule 46A, including confirmations, bank statements, and financial details of lenders. The CIT(A) admitted the additional evidence after noting the extremely short time gap between issuance of show-cause notice and completion of assessment, forwarded the material to the AO, and obtained a remand report.
After considering the remand report and the evidences, the CIT(A) held that the assessee had duly discharged the initial onus under section 68 by proving the identity of lenders, their creditworthiness, and the genuineness of loan transactions, and accordingly deleted the entire addition. The Tribunal affirmed this finding, observing that once the statutory onus is discharged with supporting evidence and examined in remand proceedings, no addition under section 68 can survive. Consequently, the Revenue’s appeal was dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
