ACE Urban Developers Private Limited Vs ACIT (ITAT Visakhapatnam)
ITAT Visakhapatnam held that addition under section 68 of the Income Tax Act towards unsecured loan sustained as creditworthiness of the lender not proved. Accordingly, ground raised by the assessee dismissed.
Facts- The assessee is a domestic company engaged in the business of development of smart cities. The assessee filed its Return of Income for the impugned Assessment Year on 17.10.2016 admitting total loss at Rs.1,48,76,020/-. The case was selected for complete scrutiny. AO completed the assessment u/s. 143(3) of the Act on 26.12.2018 after making various additions.
Thereafter, Pr. CIT exercising his powers u/s. 263 of the Act set-aside the assessment and directed AO to make a denovo assessment with specific directions. AO during the fresh assessment proceedings noticed that Shri Ch. Anil Kumar had given an unsecured loan of Rs. 4,02,37,000/- to the assessee Company out of which assessee repaid an amount of Rs. 2,96,10,000/-. Therefore, AO held the balance amount of Rs. 1,06,27,000/- outstanding in the books of accounts at the end of the year as unexplained sum u/s. 68 of the Act.
CIT(A) upheld the addition. Being aggrieved, the present appeal is filed.
Conclusion- Held that assessee has stated that unsecured loans has been funded by way of past savings, loans taken by him, and repayment of advances received from other companies. Even before us the Ld.AR stated same arguments. However, Ld.AR has not substantiated by providing evidences even before us. Further, it is observed by the Ld. CIT(A) that the assessee has provided only confirmations but has not provided the bank statements substantiating the creditworthiness of Shri Ch. Anil Kumar. We are therefore of the considered view that the Ld. CIT(A) has rightly adjudicated on this issue and therefore find no infirmity in the order of Ld.CIT(A). The grounds raised by the assessee are therefore dismissed.
