ITO Vs Jayshree Arvind Shah (ITAT Ahmedabad)
CIT(A) Rightly Accepted Unsecured Loans & Housing Loan Interest—ITAT Rejects Revenue’s Challenge
Revenue challenged deletion of two additions by CIT(A):
Addition of ₹2,23,10,021 u/s 68 (Unsecured Loans)
AO noticed an increase in unsecured loans & treated it as unexplained cash credit since, according to him, only identity of lenders was proved. CIT(A) found that Assessee had submitted confirmations, PAN, address, ITRs & bank statements of all lenders, establishing identity, genuineness & creditworthiness. Also, business required funds for auctions & similar loans existed in past years.
Before ITAT, the DR could not dispute these facts. Tribunal held that once complete evidence was filed & no adverse material was found, Section 68 addition could not survive. CIT(A)’s order was upheld.
Disallowance of ₹2,00,000 u/s 24(b) (Interest on Housing Loan)
AO disallowed for lack of evidence. CIT(A) noted that the Assessee produced loan sanction letter, repayment schedule & proof of interest payment to Reliance Home Finance. The DR argued property was co-owned & verification was needed to see if spouse also claimed deduction.
Tribunal rejected this plea, stating that AO had all documents but failed to examine them, so no second chance can be given. Deduction u/s 24(b) was rightly allowed.
