ITO Vs Leena Haresh Harde (ITAT Mumbai)
Income Tax Appellate Tribunal (ITAT) Mumbai Bench has ruled in favor of individual assessee Leena Haresh Harde, deleting an addition of ₹3,67,00,000 made under Section 68 of the Income Tax Act, 1961, which pertained to unsecured loans. The tribunal’s decision, issued on August 8, 2017, for the Assessment Year 2013-14, upheld the order of the Commissioner of Income Tax (Appeals) [CIT(A)].
The Dispute: Genuineness of Unsecured Loans
The case originated from the reopening of Ms. Harde’s assessment based on information from the Pr.DIT(Inv.)-I, Mumbai. The information suggested that Ms. Harde was a beneficiary of alleged accommodation entries provided by Shri Gautam Jain and others, who had confessed to providing such entries during search proceedings initiated against them. Based on this, the Assessing Officer (AO) concluded that Ms. Harde had obtained bogus unsecured loan entries from M/s. Marine Gems Pvt. Ltd., M/s. Nikhil Gems Pvt. Ltd., and M/s. Parshwanath Gems Pvt. Ltd. The AO invoked Section 145(3) of the Act, rejected the books of accounts, and treated the unsecured loans as unaccounted money under Section 68.
Before the CIT(A), Ms. Harde asserted the genuineness of these loans, providing loan confirmations, acknowledgments of returns, bank statements, and financial statements of the creditors to prove their identity, genuineness, and creditworthiness. The CIT(A), considering these evidences and various judicial pronouncements, deleted the addition.
