Lumino Industries Limited Vs DCIT (ITAT Kolkata)
Low Income ≠ Bogus ; When Documents Prove Genuineness, Search Labels Cannot Override- Once Proof Filed, Onus Shifts
Assessee, amalgamated with JATS Agency Pvt Ltd pursuant to NCLT order for AY 2020-21, faced addition u/s 68 of ₹15,00,000 towards unsecured loan received from Eiffel Agencies Pvt Ltd (EAPL). AO alleged that EAPL appeared in the “Jamakarchi” / accommodation-entry list found during search on Goel Group & treated the loan as unexplained cash credit despite Assessee furnishing confirmations, PAN, bank statements, financials & all primary evidences. AO accepted another loan from Godavari Vyapaar Pvt Ltd but made addition only for EAPL. CIT(A) upheld the addition solely on the ground that lender had low operating income & minimal assets.
Tribunal held that low income or low fixed assets cannot be a ground to treat a lender as non-genuine, relying on CIT Vs Mayawati (338 ITR 563). Assessee had filed complete evidences & AO had not identified any defect, nor conducted any enquiry beyond relying on generic “search report”. Tribunal applied Calcutta HC ruling in PCIT Vs Sreeleathers (448 ITR 332) which holds that when lender confirms the transaction in response to notice u/s 133(6), & documents are on AO’s file, addition cannot be made without contradicting those evidences. Tribunal also noted absence of any adverse material showing that funds returned to Assessee or were unexplained. Accordingly, addition of ₹15,00,000 u/s 68 was deleted. Consequential disallowance of interest of ₹13,315 was also deleted.
