Alvin Reality Pvt. Ltd. Vs DCIT (ITAT Delhi)
ITAT Delhi Confirms ₹14.69 Cr Bogus Loan Addition – Section 68 Applied: No Creditworthiness, No Relief -Lenders With Income Below ₹2,000 Cannot Advance Crores, Rules Tribunal
Assessee filed return declaring net loss of ₹4.06 crore. AO completed assessment u/s 143(3) at income of ₹10.58 crore by adding ₹14.69 crore as unexplained loans- ₹3.75 crore from Abhirati Infrastructure Pvt. Ltd. & ₹10.93 crore from Bridgette Infrastructure Pvt. Ltd. AO treated them as sham & non-genuine. CIT(A) upheld the addition.
Key Facts Considered by AO & CIT(A):
- Assessee produced confirmations, ITRs & bank statements of lender companies.
- However, Abhirati Infrastructure had income of only ₹1,841 & reserves of ₹2,188, while Bridgette Infrastructure had income of ₹1,490 & reserves of ₹1,778.
- Share capital of both companies was only ₹1 lakh each, rendering them incapable of lending crores.
- Inspector’s local enquiry revealed that both companies did not exist at given addresses.
- Assessee argued that offices remained closed as directors were mostly out on project negotiations, but no evidence was produced to substantiate this.
Tribunal’s Findings:
- Mere production of ITRs & bank statements did not establish creditworthiness of lender companies.
- Findings of AO’s field enquiry remained uncontroverted.
- Onus shifted to Assessee after adverse material was confronted, but it failed to discharge it.
- Since Assessee could not prove identity, genuineness & creditworthiness of creditors, addition u/s 68 was fully justified.
- Appeal dismissed; addition of ₹14.69 crore sustained in entirety.
FULL TEXT OF THE ORDER OF ITAT DELHI
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