DCIT Vs OMGL Refinery Limited Liability Partnership (ITAT Jaipur)
Low Returned Income Cannot Eclipse Audited Financial Capacity: Jaipur ITAT Deletes ₹5-Crore Section 68 Addition
Summary: The Jaipur Bench of the Income Tax Appellate Tribunal dismissed the Revenue’s appeal and upheld the CIT(A)’s deletion of a Rs.5 crore addition made under Section 68 of the Income-tax Act, 1961 in the case of OMGL Refinery Limited Liability Partnership for Assessment Year 2023-24.
The assessee, an LLP, filed its return for AY 2023-24 declaring total income of Rs.6,58,12,780/-. The return was selected for scrutiny on account of low net profit, a large-value refund claim and large squared-up loans during the year. During assessment proceedings, the Assessing Officer questioned an unsecured loan of Rs.5 crore received from M/s Synergy Tradelink, primarily because the lender had declared income of only Rs.11,57,230/-.
The assessee furnished confirmation, ledger account, bank statements, ITR acknowledgement, audited financial statements and tax audit report of Synergy Tradelink to establish the identity, creditworthiness and genuineness of the transaction. It explained that the Rs.5 crore loan was received on 13.04.2022 and was repaid through banking channels during the same financial year. The lender’s audited accounts also reflected unsecured loans of Rs.60,03,28,391/- as on 31.03.2023.
