DCIT Vs Deserve Exim Pvt. Ltd (ITAT Mumbai)
The appeal was filed by the Department against the order dated 30.07.2025 passed by the Commissioner of Income Tax (Appeals), Mumbai, for Assessment Year 2012–13. The primary issue concerned deletion of an addition of ₹6,00,00,000 made under Section 68 of the Income Tax Act, 1961, along with disallowance of interest of ₹17,37,000 on loans availed by the assessee.
The assessee, a resident corporate entity engaged in real estate development including slum development projects, filed its original and revised returns declaring income of ₹15.33 crore and ₹15.25 crore respectively. During assessment, the Assessing Officer (AO) noticed unsecured loans of ₹2 crore each from two companies. Based on materials seized during a search conducted in the case of Shri Praveen Kumar Jain, the AO observed that the lender companies were entities allegedly providing accommodation entries. He concluded that the lenders lacked creditworthiness as they were running into losses and treated the total loan amount of ₹4 crore as unexplained cash credit under Section 68. Interest paid on these loans was also disallowed.
On appeal, the assessee furnished additional documentary evidence under Rule 46A. The First Appellate Authority forwarded the evidence to the AO for verification. During remand proceedings, notices under Section 133(6) were issued to both lender companies seeking details including ITR copies, bank statements, and loan confirmations. Both lenders responded and furnished the required documents, which were verified. The remand report dated 25.04.2025 recorded that the documentary evidence was verified and no deficiencies were found. It was also noted that one loan was repaid during the same assessment year and the other was repaid in A.Y. 2014-15.
