ACIT Vs Trishul Reality Infra LLP (ITAT Mumbai)
Addition u/s 68 on Alleged Accommodation Loan Deleted – Assessee Not Required to Prove Source of Source for Unsecured Loan – ITAT Mumbai
The Revenue challenged deletion of addition of ₹40 lakh u/s 68 alleging that the assessee LLP was ultimate beneficiary of accommodation entries routed through a shell company, M/s Mahagouri Vintrade Pvt. Ltd., via lender M/s Gulmohar Towers Pvt. Ltd. The AO treated the loan as unexplained on the basis of Investigation Wing findings that the upstream company was a paper entity.
ITAT noted that the assessee had directly received funds only from Gulmohar Towers Pvt. Ltd. and had furnished complete documentary evidence including PAN, financials, confirmations, bank statements and ITR details establishing identity, genuineness and creditworthiness of the lender. The Tribunal observed that the disputed amount formed part of an earlier addition of ₹1.83 crore which had already been deleted in appellate proceedings after holding that the assessee discharged its onus u/s 68. Further, addition on substantive basis had already been sustained in another group entity, and therefore repeating addition in assessee’s hands would amount to double taxation.
The Bench held that for AY 2012-13 the assessee was not required to prove “source of source” in respect of unsecured loans, relying on Bombay High Court rulings including Gagandeep Infrastructure Pvt. Ltd. Since the assessee had no direct transaction with the alleged shell company and had proved the immediate lender, CIT(A) was justified in deleting the addition. Accordingly, Revenue’s appeal was dismissed and assessee’s cross-objection became infructuous.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
