Author: Khushi J Prajapati
The Income Tax Appellate Tribunal (ITAT) Ahmedabad upheld the decision of the Commissioner of Income Tax (Appeals) which deleted the additions made by the Assessing Officer (AO) under sections 68 and 69C of the Income Tax Act.
The ITAT observed that Ao’s conclusions were based on assumptions and lacked substantial evidence as the AO had failed to provide concrete adverse comments on the genuineness and creditworthiness of loan creditors in their remand report.
The court found that the assessee had provided substantial evidence, including ID proofs, assessment orders, bank statements, and creditor confirmations, demonstrating the transactions’ authenticity. The repayment of the loans in subsequent years further validated the genuineness of this transactions.
The ITAT dismissed the Revenue’s appeal upholding the CIT(A)’s order.
FACTS
Tripoli Management Pvt. Ltd. went through an investigation for the assessment year 2016-17. The total income disclosed by the company in its return was ₹20,48,130/-. The Assessing Officer (AO), when assessing, saw that unsecured loans obtained by the company amounted to ₹55,05,27,020/-and interest payments amounting to ₹3,94,15,139/- were made. On further investigations, it was found by the AO that many loan creditors with addresses in Kolkata never existed. As a result, the AO added peak credit obtained from such loans as part of income according to section 68 while disallowing the interests paid on them as unexplained expenses thus violating section 69C.
Case Details
Case Title – DCIT Ahmedabad vs Tripoli Management Pvt Ltd
Tribunal: Income Tax Appellate Tribunal (ITAT), “C” Bench, Ahmedabad.
Case Number: ITA No.5/Ahd/2024
Assessment Year: 2016-17
Judges -Judicial Member: Shri Siddhartha Nautiyal; Accountant Member: Shri Makarand V. Mahadeoka