FORTUNE METALS TRADING PRIVATE LIMITED,MUMBAI vs. ACIT 3(1)(2), AAYKAR BHAWAN

ORDER \nPER NARENDRA KUMAR BILLAIYA, AM:\nThis appeal by the assessee is preferred against the order dated\n27/05/2025 by NFAC, Delhi (hereinafter “the ld. CIT(A)\"\} pertaining to\nAY 2013-14.\n2.\nThe grievance of the assessee read as under:-\n“1. On the facts and in the circumstances of the case and in law, the Commissioner of\nIncome Tax erred in confirming the addition of Rs.17,14,39,723/- to the income under\nSection 147 of the Income Tax Act, 1961, without giving due consideration to the\nsubmissions made by the assessee and without proper appreciation of the material facts\nof the case.\"\n2. On the facts and in the circumstances of the case and in law, the Commissioner of\nIncome Tax erred in upholding the disallowance of interest expenses of Rs.45,36,998/-\npaid by the Appellant on loans utilized for acquiring income-generating rental\nproperty, having failed to properly appreciate the nexus between the borrowed funds\nand the income-earning asset.\n3. assessee/appellant craves leave to add/alter/modify any/all grounds of appeal.\"\n\nआयकर अपीलीय अधिकरण\nINCOME TAX APPELLATE TRIBUNAL\nI.T.A. No. 4610/Mum/2025\n2\n3. Briefly stated the facts of the case are that the assessee filed its return\nof income on 29/09/2013 declaring total income at Rs.44,14,610/-. The\nreturn was selected for scrutiny assessment and accordingly statutory\nnotices were issued and served upon the assessee. While scrutinizing the\nreturn of income, the AO noticed that the assessee has purchased a\npremise being Floor No 1, 2, 3 of Phase I and 4h Floor of Phase II and 5th\nFloor situated in 'Lodha Excelus', N.M Joshi Marg, Chinchpokli, Mumbai\n400011. The AO found that the said property is leased out to KPMG from\nwhom assessee is earning \"income from House Property'. The AO further\nfound that the assessee has received unsecured loans from Amit Kumar\nJain amounting to Rs.61,61,053/- and from Tirupati Power Infra Projects\nPvt Ltd. Rs.2,82,78,670/- and has also received share application money\nfrom the same company at Rs.13,70,00,000/-. The borrowed funds were\nutilized for purchasing the aforementioned immovable property. The\nassessee was asked to explain the credit entries mentioned hereinabove in\nthe light of Section 68 of the Act. The assessee furnished necessary details\nexplaining the identity, genuineness of the transactions and capacity,\ndischarging the initial onus cast upon it by the provisions of Section 68 of\nthe Act. The submissions of the assessee were dismissed by the AO who\nconcluded by holding that the assessee has failed to discharge the onus\nand completed the assessment proceedings by making addition of Rs.\n17,14,39,723/- u/s 68 of the Act which also included additions of Rs.\n45,36,998/- being interest claimed on the unsecured loans mentioned\nhereinabove. The assessee carried the matter before the ld. CIT(A) but\nwithout any success.\n4. Before us, the ld. Counsel for the assessee reiterated what has been\nstated before the lower authorities and referred to the documentary\nevidence which were furnished before the lower authorities to\n\nआयकर अपीलीय अधिकरण\nINCOME TAX APPELLATE TRIBUNAL\nI.T.A. No. 4610/Mum/2025\n3\ndemonstrate that the assessee has successfully discharged the initial onus\ncast upon it by the provisions of Section 68 of the Act.\nPer Contra, the ld. D/R strongly supported the findings of the AO.\n5. We have carefully considered the orders of the authorities below.\nInsofar as the borrowings from Amit Kumar Jain is concerned, he is one\nof the Directors of the assessee company, therefore, identity is\nunquestionable. His ITRs are placed on record along with confirmation of\ncopy of ledger account. From the bank statement of Amit Kumar Jain, we\nfind that he had a clear balance of Rs.25,14,278/- on 30/07/2012, out of\nwhich he gave loan to the assessee Rs.25,00,000/- through RTGS. We\nfurther find from his bank account that he had clear balance of Rs.\n25,90,488/- on 19/07/2012 out of which he gave loan to the assessee. In\nfact the loans given by Amit Kumar Jain are clearly reflected in his bank\nstatements where he was having clear balance to give the impugned loan.\nTherefore, we are of the considered view that the assessee has successfully\ndischarged the onus cast upon it by the provisions of Section 68 of the Act\ninsofar as the loan from Amit Kumar Jain is concerned.\n5.

1. Insofar as the loan from Tirupati Power Infra Projects Pvt. Ltd., is\nconcerned, during the course of assessment proceedings itself, the\nassessee clarified that inadvertently Rs.13.70 Crores have been shown as\nshare application money but the same is unsecured loan. Along with the\nunsecured loan of Rs.2,82,78,670/-. The AO issued notice u/s 133(6) of\nthe Act to the lender company asking it to give details of PAN, copy of\nITR along with audited financial accounts and the details of loans given\nto the assessee from AY 2011-12 to AY 2014-15 along with certified copy\nof ledger accounts, the details sought by the AO from Tirupati Power Infra\nProjects Pvt Ltd.\n\nआयकर अपीलीय अधिकरण\nINCOME TAX APPELLATE TRIBUNAL\n \n4\n5.