ITO Vs Pushpa Construction Company (ITAT Mumbai)
The appeal before the Income Tax Appellate Tribunal concerned Assessment Year 2018–19 and was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals), which had deleted multiple additions made by the Assessing Officer relating to unsecured loans, work-in-progress (WIP), and property sales.
Unsecured Loans (₹32.67 crore): During assessment proceedings, it was observed that the assessee, a partnership firm engaged in real estate development, had received unsecured loans from 201 parties amounting to ₹39.83 crore. The assessee furnished confirmations for only 67 parties (₹7.15 crore), while no documentary evidence was submitted for the remaining 134 parties (₹32.67 crore). Accordingly, the Assessing Officer made an addition under section 68.
During appellate proceedings, the assessee submitted additional evidence for 93 parties and further details for 36 parties during remand proceedings. However, the Assessing Officer noted that complete documentation, such as identity proof, bank statements, ITRs, and confirmations, was still missing for several parties, and no details were submitted for 5 creditors. Despite this, the CIT(A) deleted the entire addition, holding that the assessee had furnished sufficient details.
The Tribunal found that the assessee had not discharged the primary onus under section 68 to establish identity, creditworthiness, and genuineness for each lender. It observed that complete details were not furnished for several creditors. Accordingly, the Tribunal set aside the CIT(A)’s order and restored the issue to the Assessing Officer for fresh adjudication, granting the assessee another opportunity to submit complete evidence.
