PCIT Vs Harsh Stock Portfolio Pvt. Ltd. (Rajasthan High Court)
The Rajasthan High Court dismissed the Revenue’s appeal challenging the deletion of an addition relating to unsecured loans obtained by Harsh Stock Portfolio Pvt. Ltd. from M/s Desire Vincom Pvt. Ltd. and M/s Wellworth Tradeling Pvt. Ltd. The Revenue contended that once doubts were raised regarding the creditworthiness of the loan companies, allegedly shell companies, the assessee was required to produce the parties along with necessary documents to establish the genuineness of the transactions.
The High Court noted that the loans had been returned along with interest to the concerned companies during the same assessment year. It therefore held that no addition could be made of the income received by way of such loans as the amounts had already been returned. The Court further noted that the assessee had sufficiently proved the genuineness of the companies by producing their PAN numbers and establishing that they remained duly registered with the ROC.
The Court held that the requirement of producing the companies to remove the Assessing Officer’s doubt was far-fetched and could not be regarded as a question of law requiring examination by the High Court. Since the other aspects had been factually examined by the CIT and ITAT, the appeal was found devoid of merits and was dismissed.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
