DCIT Vs Jas Infra Space Pvt. Ltd. (ITAT Ahmedabad)
The Revenue appealed against the order of the Commissioner of Income Tax (Appeals), NFAC, dated 09.10.2024 for Assessment Year 2015-16. The appeal challenged deletion of additions of ₹44,49,09,474 under Section 68, ₹3,84,64,133 under Section 69C, and ₹30,97,68,004 relating to unexplained advances from debtors.
Regarding Ground No. 1, the Assessing Officer (AO) found that the assessee had shown unsecured loans of ₹149.66 crore and identified 14 creditor companies as shell companies. According to the AO, the assessee failed to furnish confirmations, bank statements and income tax returns of these companies and therefore failed to establish their identity, creditworthiness and the genuineness of the transactions. The AO treated loans of ₹18,01,93,895 as unexplained cash credits under Section 68 and also disallowed interest of ₹93,12,893. The AO further examined loans of ₹26,47,15,579 received from five parties and observed that, although some confirmations and income tax returns were furnished, the declared incomes of those entities did not establish their creditworthiness. The unsecured loans from all 19 parties and the related interest were accordingly treated as non-genuine.
The CIT(A) deleted the additions after recording that the assessee had produced confirmations, income tax acknowledgements, bank statements, audit reports and other documentary evidence establishing the identity, creditworthiness and genuineness of the loan transactions. The CIT(A) also relied on the Tribunal’s earlier common order in the assessee’s own case for Assessment Years 2012-13, 2013-14 and 2014-15, which had deleted similar additions under Section 68. It was further observed that the creditors’ identities were supported by PAN details, ROC filings and other registration documents, certain creditors’ net worth statements reflected significant assets, and all loans had been routed through banking channels. The CIT(A) also deleted the disallowance of interest, noting that interest had been paid through banking channels after deduction of TDS.
