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Facts
The Revenue appealed against the CIT(A)'s order deleting an addition of ₹9.45 Crores made by the AO under Section 68 for bogus unsecured loans for AY 2021-22. A search was conducted on the Goel Group (including the assessee), revealing the routing of unaccounted funds through shell companies disguised as unsecured loans. The AO found the assessee couldn't prove creditworthiness or genuineness, and notices under Section 133(6) were unserved or unresponded.
Held
The ITAT upheld the CIT(A)'s decision, confirming that the assessee had discharged its onus to prove the identity, creditworthiness, and genuineness of the loan transactions by submitting comprehensive documentary evidence, including ITRs, audited accounts, and bank statements. The Tribunal noted that the loans were repaid, and following the precedents of PCIT v. Ambe Tradecorp (Pvt.) Ltd. (Gujarat High Court) and its own decision in Dailmer Industries Pvt. Ltd., held that credit entries cannot be isolated from debit entries once repayment is established.
Key Issues
Whether the CIT(A) was correct in deleting the addition under Section 68 of the Income Tax Act for unsecured loans, interest, and commission, when the assessee had provided evidence of identity, creditworthiness, and genuineness, and the loans were repaid.
Sections Cited
68, 132(1), 133A, 143(1), 133(6), 131, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
This is an appeal preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals), Kolkata-20 (hereinafter referred to as the “Ld. CIT(A)”] dated 21.10.2024 for the AY 2021-22.
The only issue raised by the revenue is against the deletion of addition of ₹9.45 Crores by ld. CIT (A) as made by the ld. AO under Section 68 of the Act in respect of bogus unsecured loans.
The facts in brief are that assessee filed the return of income on 05-02-2022, which was subsequently revised declaring total income at ₹87,530/-. The return of income was processed under Section 143(1) of the Act. The assessee company is a group company of Goel Group of Cases. A search was conducted under Section 132(1) of the Act and
In the appellate proceedings, the learned CIT (A) allowed the appeal of the assessee by holding that the loans raised by the assessee during the year were repaid partly in the current year and partly in the subsequent assessment years the details whereof are attached at page no.354 to 360 PB. The learned CIT (A) while deleting the addition also relied on the decision of the Hon. Gujarat High Court in the case of PCIT v. Ambe Tradecorp (P.) Ltd. (2022) 145 taxmann.com 27 (Gujrat). Finally, the learned CIT (A) held that appellant has discharged its burden to prove the identity and creditworthiness of the lenders and genuineness of the transactions by submitting detailed submission including MCQ datas, the copy of ITRs audited accounts, ledger copies, bank statements before the learned AO as well as before the appellate authority. The learned CIT (A) also noted the loan creditors have also duly complied with the notices issued under section 133(6) of the Act by the AO and hence deleted the addition.
After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessee has raised unsecured loans from several parties the details whereof are given in para no. 4.1 of the assessment order. The assessee had taken ₹9.85 crore in aggregate from various parties. The assessee also paid interest on these loans amounting to ₹45,38,923 after deduction of tax. We also note that these loans were repaid by the assessee in the subsequent years which have been discussed in detail by the appellate authority in the appellate folder. We note that the assessee has filed all the evidences from all the lenders before the learned CIT (A)
The other issue raised in the other ground namely ground No. 2 and 3 are consequential in nature. Therefore, we uphold the order of the learned CIT (A) on this issue by dismissing the appeal of the revenue on this issue. Accordingly, the ground number 2 and 3 are dismissed.
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 16.10.2025.