Nisarg Lifespace LLP Vs ITO (ITAT Mumbai)
Summary: The Mumbai Bench of the Income Tax Appellate Tribunal partly allowed the appeal of M/s. Nisarg Lifespace LLP for Assessment Year 2013-14 and directed deletion of the addition of ₹4 crore made under Section 68 of the Income Tax Act, 1961 in respect of unsecured loans. The Tribunal also directed that interest of ₹39,70,001/- paid on the loans be allowed as deduction.
The assessee, a builder and developer, had received unsecured loans aggregating to ₹4 crore from five parties—Sumukh Commercial Pvt Ltd, Olive Overseas Pvt Ltd, Josh Trading Co Pvt Ltd, Casper Enterprises Pvt Ltd and Nakshatra Business Pvt Ltd. The Assessing Officer treated the loans as unexplained cash credits primarily on the basis of the search conducted under Section 132 on Shri Praveen Kumar Jain and concerns managed by him, alleging that those concerns were engaged in providing accommodation entries.
The assessee contended that no statement of Shri Praveen Kumar Jain or his accomplices specifically named the assessee and that Shri Praveen Kumar Jain had subsequently retracted his statement by affidavit dated 15 May 2014. The assessee also sought cross-examination of Shri Praveen Kumar Jain, but such cross-examination was not provided by either the Assessing Officer or the CIT(A).
