Case Law Details
BMM Ispat Limited Vs ACIT (ITAT Bangalore)
Introduction: The case of BMM Ispat Limited versus ACIT (Income Tax Appellate Tribunal, Bangalore) revolves around disputes concerning unsecured loan sources. In this detailed analysis, we delve into the contentions raised by both parties, the arguments presented, and the tribunal’s ruling.
Detailed Analysis: The appellant, BMM Ispat Limited, contested the order of the National Faceless Assessment Centre (NFAC) for the assessment year 2016-17, wherein additions totaling Rs. 150,13,10,676/- were made under section 68 read with section 115BBE of the Income Tax Act, 1961. The appellant raised various grounds challenging the addition, including assertions of insufficient opportunity provided by the assessing officer (AO), lack of jurisdiction, and violation of natural justice.
The appellant argued that it had submitted all relevant details regarding the loans received from directors and related parties, demonstrating the transactions’ genuineness. The loans were transacted through banking channels, supported by account payee cheques and RTGS. Moreover, the appellant highlighted the longstanding tax assessment history of the lenders and the adequacy of their financial resources.
However, the respondent, represented by the Departmental Representative (DR), contended that the appellant failed to adequately establish the creditworthiness of the lenders and the genuineness of the transactions. It was argued that the documents provided were self-serving and insufficient to justify the substantial loan amounts. The DR raised doubts about the capacity of the creditors to extend such significant loans, given their reported income levels.
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