ACIT Vs Shree Developer (ITAT Mumbai)
Sec 68 Addition Deleted – Mere Third-Party Statement on Alleged Entry Provider Insufficient Without Independent Evidence – ITAT Mumbai
In this case, reassessment u/s 147 was initiated based on Investigation Wing information alleging that loans received from certain companies were accommodation entries. The AO relied mainly on the statement of a third party admitting that the lending companies were paper entities and treated ₹60 lakh unsecured loans as unexplained cash credit u/s 68.
The assessee contended that loans were genuine and furnished confirmations, ITRs, bank statements, audited financials and evidence of repayment with interest after TDS deduction. The CIT(A) accepted that the assessee had discharged the primary onus regarding identity, creditworthiness & genuineness and deleted the addition.
On Revenue’s appeal, ITAT upheld the CIT(A)’s order observing that the AO made the addition solely based on the statement of the alleged entry operator without bringing any independent corroborative material. The Tribunal noted that documentary evidences submitted by the assessee were not disproved, loans were routed through banking channels and were subsequently repaid with interest. Hence, mere reliance on a third-party statement, without further enquiry or adverse material, cannot justify addition u/s 68. Accordingly, Revenue’s appeal was dismissed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The Revenue has filed the present appeal against the impugned order dated 08/07/2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2012-13.
