VENKATA RAMANA RAO NEERELLA,HYDERABAD vs. ITO., WARD-4(1), HYDERABAD

The brief facts of the case are that, the assessee was carrying on the business of trading in pharma chemicals in the name and style of “M/s. Aditya Trading Company” and filed his return of income for A.Y. 2022-23. The case was selected for scrutiny, and the assessment had been completed under Section 143(3) r.w.s. 144B of the Income Tax Act, 1961 on 24.03.2024, where the A.O. had made addition towards unproved unsecured loan of Rs. 8,00,000/- from M/s. Eesavyasa Technologies Limited and further sum of Rs. 6,00,000/- from Shri G. Satyam Reddy under Section 68 of the Income Tax Act, 1961. On appeal, the Ld. CIT(A) confirmed the addition made by the A.O. on the ground that, although the assessee had furnished confirmation from the loan creditors along with bank statements, but the bank statements submitted by the assessee are uncertified and no affidavits, covering letters, or confirmation letters regarding the genuineness of the loans from the lenders were filed.

Aggrieved with the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.

The learned counsel for the assessee, Ms. Mrudulatha, C.A., and Shri Kranthi Palivelu, C.A., referring to various documents, including confirmation from the lenders, submitted that, both the loan creditors confirmed the loan transactions with the assessee. Further, both the loan creditors have paid unsecured loans to the assessee through proper banking channel. The assessee has furnished all the evidences, including bank account statements. The Ld. CIT(A) although accepted the fact that the assessee has confirmed the loan transactions, but sustained the addition only on the ground that the bank statements are not certified and since the bank statements submitted by the assessee are computer- generated, which do not require certification, the Ld. CIT(A) ought not to have confirmed the addition and thus, the addition made by the A.O. should be deleted.

The learned Senior A.R. for the Revenue, Shri T. Sunil Gowtham, on the other hand, relied upon the order of the Ld. CIT(A).

We have heard both parties, perused the material available on record and had gone through the orders of the authorities below. There is no dispute with regard to the fact that the assessee has received loan of Rs. 8,00,000/- from M/s. Eesavyasa Technologies Limited and also received Rs. 6,00,000/- from Shri G. Satyam Reddy. Both the loan creditors confirmed the loan transactions by filing confirmation letters along with bank statements. The assessee has furnished copies of confirmation letters and bank statements and upon perusal of the bank statements, we find that, Shri G. Satyam Reddy had transferred a sum of Rs. 6,00,000/- to M/s. Aditya Trading Company on 13.01.2022. Similarly, M/s. Eesavyasa Technologies Limited has also transferred a sum of Rs. 8,00,000/- on 10.08.2021. From the details filed by the assessee, it is undisputedly clear that the assessee has discharged the identity of the loan creditors and also proved the creditworthiness and genuineness of the parties. Therefore, in our considered view, the Ld. CIT(A) ought not to have confirmed the addition made by the A.O. only on the basis of uncertified bank statements submitted by the assessee. In our considered view, the bank statements submitted by the assessee are computer-generated documents which do not require any signature or certification from the Bank. Therefore, the Ld. CIT(A) having noticed the fact that, the loan has been received through proper banking channel and the parties have confirmed the transactions, should have deleted the addition made by the A.O. under Section 68 of the Act. Thus, we set aside the order of the Ld. CIT(A) and direct the A.O. to delete the addition made towards unsecured loans amounting to Rs. 14,00,000/- made under Section 68 of the Income Tax Act, 1961. 7. In the result, the appeal filed by the assessee is allowed.

The Principal Commissioner of Income Tax, Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file