ACIT Vs Maheshwari Coal Benefication and Infrastructure Pvt. Ltd. (ITAT Raipur)
Summary: The Income Tax Appellate Tribunal, Raipur Bench, dismissed the Revenue’s appeal against the order dated 10.10.2025 of the CIT(A)-3, Nagpur for Assessment Year 2016-17. The Tribunal upheld deletion of an addition of Rs.1,15,00,000 made by the Assessing Officer under Section 68 of the Income-tax Act, 1961 in respect of unsecured loans and consequential disallowance of interest of Rs.3,34,166.
The assessee, a company engaged in the business of trading of coal and transportation, had filed its return of income on 05.10.2016 declaring total income of Rs.2,23,56,280/-. During assessment proceedings, the Assessing Officer noticed unsecured loans aggregating to Rs.2,85,00,000 from five companies, namely Ambashree Infratech Pvt Ltd., Best Advisory Pvt. Ltd., Dinbandhu Suppliers Pvt. Ltd., Maa Shanti Business Pvt. Ltd. and Origin Deal Trade Pvt. Ltd. Interest of Rs.3,34,166/- was also reflected in respect of certain loans.
The Assessing Officer required the assessee to produce loan confirmations, income-tax returns, financial statements and bank statements of the lenders to examine their identity, creditworthiness and the genuineness of the transactions. The assessee furnished confirmations, ITRs, financial statements, MOAs and bank statements. The Assessing Officer thereafter deputed an Inspector to Kolkata to verify the existence of the lender companies at their addresses appearing in the tax audit report and MCA records. According to the Inspector’s report, no physical presence of the companies was found at the places visited. The Assessing Officer also noted their low or meagre incomes and concluded that they did not have the financial capacity to advance loans of the stated amounts.
