ACIT Vs SRKM Steel (P) Ltd. (ITAT Guwahati)
Loan Repayment Seals Genuineness: Guwahati ITAT Upholds Deletion of ₹2.86 Cr 68 Addition on Unsecured Loans
Guwahati ITAT, Guwahati Bench, in ACIT Vs SRKM Steel (P) Ltd. (ITA No.168/GTY/2020; AY 2017-18; order dated 15-12-2025), dismissed the Revenue’s appeal and upheld the deletion of ₹2,86,21,750 added u/s 68 on account of unsecured loans and related interest.
The assessee had received unsecured loans aggregating ₹2.82 crore from various corporate lenders and paid interest of ₹4.21 lakh. During assessment, the AO doubted the creditworthiness of lenders citing their low turnover and treated the loans as accommodation entries, despite the assessee furnishing confirmations, audited financials, bank statements and PAN details.
The Tribunal noted that the assessee had repaid the loans in subsequent assessment years, a crucial fact recorded by the CIT(A). Once repayment is established through documentary evidence, the credit entries cannot be viewed in isolation by ignoring the debit entries in later years. The Tribunal relied on a catena of jurisdictional Calcutta High Court rulings (including Rahul Premier India Agency Pvt. Ltd., Narayan Tradecom Pvt. Ltd., Alom Extrusions Ltd.) and Gujarat High Court in Ambe Tradecorp (P) Ltd., which consistently hold that section 68 cannot be invoked where identity, genuineness and subsequent repayment are proved.
Rejecting the Revenue’s plea that the loans were mere accommodation entries, the ITAT held that presumptions cannot substitute evidence and that the AO had failed to point out any defect in the documents furnished. Accordingly, the Revenue appeal was dismissed in toto, reaffirming that repayment of loans is a strong indicator of genuineness and defeats 68 additions
FULL TEXT OF THE ORDER OF ITAT GUWAHATI
This is an appeal preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals)-2, Guwahati (hereinafter referred to as the “Ld. CIT(A)”] dated 03.07.2020 for the AY 2017-18.
