DCIT Vs Subh Raipur Vyapar Vihar Developers LLP (ITAT Raipur)
A Loan Repaid Before Reopening Cannot Be Branded Fictitious on Mere Suspicion-Credit & Debit Entries Must Be Read Together
The Raipur Bench of the ITAT has upheld the deletion of an addition u/s 68 where the unsecured loan was received and repaid through banking channels, interest was regularly credited, and the repayment had taken place almost one year before initiation of reassessment proceedings. Once the Revenue fairly conceded that the loan had been repaid and its genuineness was not doubted, the transaction could not be isolated at the credit stage and treated as a fictitious accommodation entry.
The assessee, Subh Raipur Vyapar Vihar Developers LLP, had obtained an interest-bearing unsecured loan from Pawan Motor and General Finance Limited during AY 2019-20. According to the assessee, the amount was not received during AY 2020-21, which was the year under appeal. The loan account was merely carried forward, and interest was credited during AYs 2019-20 & 2020-21.
The assessee subsequently repaid the loan along with interest on 13.03.2023, relevant to AY 2023-24. Both receipt and repayment were made through regular banking channels.
A notice u/s 148A(b) was issued on 29.02.2024, almost one year after the loan had already been repaid. During the proceedings, the AO characterised the loan as fictitious and made an addition u/s 68. The extracted appellate order records the amount deleted by the CIT(A) at ₹11,38,056.
