Case Law Details
ACIT Vs M/s. Sreeleathers (ITAT Kolkata)
Conclusion: Since all the lender companies were regular income tax assessee’s & having PAN as well as their ROC details were brought to the notice of AO & their respective balance sheet showed that all of them had enough creditworthiness to lend the amounts in question to assessee and assessee had squared up the loan transaction with all these lenders (except 15 Lakhs) and all the payments/TDS were made & payments were made through banking channel, therefore, the addition made by AO was untenable.
Held: Assessee was a leading shoe maker / manufacturer of leather goods had taken working capital from eleven (11) lender companies to the tune of Rs. 4.50 crores. In order to confirm the identity and genuineness of the loan transaction, it was noted that pursuant to notice issued by AO u/s 133(6), all the lender companies had responded directly to the AO. The lender companies had filed the required documents called for by AO to establish their identity, creditworthiness and genuineness of the transaction (s) etc. However, AO had issued another SCN first before six days of framing the assessment calling upon assessee to give details to prove the identity, creditworthiness and genuineness of the transaction with M/s F from whom assessee had taken Rs. 50 Lakhs and had incurred interest expenditure to the tune of Rs. 12,79,268/-.Thereafter, AO had framed the assessment by relying on the statement of Shri Ashish Kumar Agarwal which was recorded u/s 133A of the Act (on oath) in a third party case and thereafter made an addition of Rs. 4.50 crores and disallowed interest expenditure of Rs. 74,30,571/-. It was held that all the eleven (11) lender companies from which assessee had taken loan of Rs. 4,50 crore had replied directly to AO pursuant to section 133(6) and the fact that all the lender companies were regular income tax assessee’s & having PAN as well as their ROC details were brought to the notice of AO & their respective balance sheet showed that all of them had enough creditworthiness to lend the amounts in question to assessee and assessee had squared up the loan transaction with all these lenders (except 15 Lakhs) and all the payments/TDS were made & payments were made through banking channel, the addition made by AO was untenable and therefore, CIT(A) rightly deleted the addition.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal preferred by the Revenue is against the order of Ld. CIT(A)-09, Kolkata dated 14.11.2019 for Assessment year 2015-16.
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