Raheja Legacy Trust Vs ACIT (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT) Mumbai partially allowed the appeal of Raheja Legacy Trust against additions made by the Assessing Officer (AO) regarding unsecured loans. The AO had disallowed a substantial portion of the loans, citing the trust’s failure to provide complete lender confirmations and bank statements. The trust, however, submitted additional evidence under Rule 46A of the Income Tax Rules before the Commissioner of Income Tax (Appeals) [CIT(A)], explaining that COVID-19 restrictions hindered earlier submissions. The CIT(A) accepted these additional documents and sought a remand report from the AO.
The CIT(A) observed that the AO, in the remand report, acknowledged that only loan amounts credited during the assessment year should be considered under Section 68 of the Income Tax Act. The CIT(A) also referred to a detailed statement (Annexure-14) submitted by the trust, which provided comprehensive information on each loan. This statement demonstrated that the trust had raised fresh loans of only Rs. 86,10,21,727/- during the year, while the initially disputed amount of Rs. 3,04,18,92,727/- represented the total outstanding loan amount as of the year’s end, including loans carried forward from previous years. The trust further explained that all loan transactions were conducted through account payee cheques or electronic transfers (NEFT/RTGS/ECS). The trust also pointed out that it had undergone scrutiny assessments for several preceding assessment years, and provided copies of loan applications. The trust explained that many lenders, including senior citizens and women, were unable to provide all requested details due to the pandemic. A chartered accountant’s certificate verifying the genuineness of the new loans was also submitted.
