ITO Vs Wisdom Inc. (ITAT Rajkot)
Relevant Facts
The assessee filed its return for AY 2023-24, declaring total income of ₹2,31,57,990. The case was selected for scrutiny, during which notices u/s 143(2) & 142(1) were issued.
The AO noticed that the assessee had received unsecured loans of ₹21 crore from Bloom Dealers Pvt. Ltd. & ₹16 crore from Mukund Securities & Investment Ltd., aggregating to ₹37 crore.
The assessee was asked to furnish lender addresses, PAN details, ledger accounts, confirmations, interest rates, TDS particulars & copies of income-tax returns to establish their identity, creditworthiness & genuineness.
According to the AO, only partial information was initially furnished. Notices u/s 133(6) were therefore issued directly to both lenders. Although responses were not received immediately, the assessee subsequently furnished bank certificates & confirmations. Both lenders also independently responded to the statutory notices.
Mukund Securities furnished the assessee’s ledger account, loan confirmation, bank statements, balance sheet & profit & loss account. Bloom Dealers furnished its ledger account, confirmation & return copies.
The AO, however, compared the income disclosed by the lenders in their returns for AYs 2021-22 to 2023-24 with the substantial loans advanced. Since the returned incomes were comparatively modest, he concluded that the lenders lacked financial capacity. The entire amount of ₹37 crore was added u/s 68.
