Wow Entertainment and Media Private Limited Vs ACIT (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai heard an appeal by Wow Entertainment and Media Private Limited concerning an addition of ₹1.44 crore made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, 1961. This addition was related to a loan received by the assessee from Dyaneshwari Multi-State Urban Co-operative Credit Society Ltd. (DMSUCCSL) for the assessment year 2017-18. The AO had concluded that the loan was not genuine, primarily based on the statement of the manager of DMSUCCSL and the nature of the society’s transactions, and had refused the assessee request to cross-examine the manager. The Commissioner of Income Tax (Appeals) [CIT(A)] had upheld the AO’s order.
However, the ITAT, after reviewing the evidence presented by Wow Entertainment, determined that the assessee had adequately demonstrated the identity and capacity of the lender, as well as the genuineness of the loan transaction. This evidence included the loan approval documents, the loan agreement, and bank statements showing the transfer and subsequent repayment of the loan with interest. The tribunal specifically pointed out the incongruity of the AO recording the manager’s statement at the assesses premises but denying the cross-examination. Based on the totality of the evidence, the ITAT held that the assessee had met the onus of proof required under Section 68 and consequently directed the AO to remove the disputed addition. As a result, the appeal was decided in favor of Wow Entertainment, making the other grounds of appeal irrelevant.
