Loading judgment…
Facts
The Revenue alleged that the appellant took a loan from the Bhavarlal Jain Group as an accommodation entry, not a genuine transaction. The Assessing Officer (AO) reopened the assessment and made an addition under Section 68 based on information from the Director of Income Tax (Investigation).
Held
The Tribunal held that the Revenue failed to provide any evidence that the appellant took the alleged loan. The appellant had submitted an affidavit and bank statements to prove the loan was not taken, discharging their onus of proof. Therefore, the addition under Section 68 was not justified.
Key Issues
Whether the addition made under Section 68 of the Income Tax Act is sustainable when the Revenue fails to provide evidence of a loan and the assessee provides proof to the contrary.
Sections Cited
68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Mumbai “H(SMC
Before: Shri Rahul Chaudhary (JM) & Shri Omkareshwar Chidara (AM)
In this appeal filed by the Revenue, the issue to be adjudicated is whether the loan alleged to have been taken from Bhavarlal Jain Group is genuine or not. The contention of Revenue in this case is that the Ld. AO received information from Director of Income Tax (Investigation) that the appellant took a loan which is only accommodation entry. In other words, the loan taken by the appellant from Bhavarlal Jain group is not genuine in the sense that appellant has routed his unaccounted money through that Bhavarlal Jain group companies. On this basis, the assessment was reopened and addition under section 68 was made by Ld. AO despite the denial of appellant.
On appeal, the Ld. CIT(A) has deleted the addition stating that there is no material with the Revenue to show that the appellant took loan from group. Since there is no proof of loan taken, whether genuine or not, the 2 Ananya Implex addition cannot be made under section 68 of the Act in the case of appellant, held by Ld. CIT(A) and the addition was deleted.
Aggrieved by the order of Ld. CIT(A), the Revenue filed an appeal before the ITAT. The Ld. DR relied on the assessment order.
During the proceedings before the ITAT, the Ld. AR of the appellant said an affidavit was also filed by the appellant that he did not take any loan from Bhavarlal Jain group and even filed a copy of bank account to show that there is no credit entry from the above party.
Heard both sides. The Revenue could not adduce any evidence to the effect that the appellant took loan from Bhavarlal Jain group of companies. The Revenue’s contention that the appellant took an accommodation entry cannot be accepted without any evidence especially when the appellant filed an affidavit to that effect and filed a copy of bank statement and it is held that the appellant discharged his onus of proof. The Revenue did not discharge its proof that appellant took loan to make an addition under section 68 of the Act. In view of the same, the order of Ld. CIT(A) is upheld and Revenue’s appeal is dismissed.
The appeal of Revenue is Dismissed. Order pronounced in the open Court on 25/09/2025.