Singla Realters Ltd Vs ITO (ITAT Delhi)
Unsecured loan additions u/s 68 deleted – Source of source not required for A.Y. 2014-15; expenses restricted to 20% disallowance – ITAT Delhi
In Singla Realters Ltd vs ITO (A.Y. 2014-15), the AO made multiple additions including disallowance of construction material & travelling expenses and addition of ₹1.69 crore u/s 68 towards unsecured loans. The Tribunal held that since complete supporting details were not furnished for certain expenses, an ad-hoc disallowance of 20% of unsubstantiated building material and travelling expenses was reasonable instead of full disallowance.
On the major issue of unsecured loans, the ITAT observed that the assessee had submitted confirmations, ITR copies, bank statements and replies to notices u/s 133(6) establishing identity, creditworthiness and genuineness. The AO’s objection was mainly on failure to explain “source of source,” but the Tribunal noted that such requirement was not applicable for A.Y. 2014-15. Since loans were routed through banking channels and no discrepancies were found, additions u/s 68 were deleted.
Accordingly, unsecured loan additions were fully deleted, ad-hoc expense disallowance was restricted to 20%, and the assessee’s appeal was partly allowed
FULL TEXT OF THE ORDER OF ITAT DELHI
This appealby the assessee is preferred against the order of the CIT(A)- 8, Delhi dated 14.01.2020 pertaining to A.Y 2014-15.
