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Facts
The assessee company filed a return of income declaring 'Nil' income. The case was selected for limited scrutiny concerning the genuineness of unsecured loans. The Assessing Officer made an addition of Rs. 1,15,00,000/- under Section 68 of the Income Tax Act, 1961, treating the loan from Risa International Ltd. as an accommodation entry.
Held
The Tribunal held that the assessee had discharged its onus by providing the identity, creditworthiness, and genuineness of the unsecured loan. Reliance was placed on the Delhi High Court decision in Sheela Overseas Pvt. Ltd. vs. PCIT, stating that prior to the amendment of Section 68, the assessee was not required to explain the source of the source of funds for unsecured loans. The director of the lender company also appeared and confirmed the loan details.
Key Issues
Whether the addition made under Section 68 of the Income Tax Act on account of unsecured loans is justified when the assessee has provided evidence of identity, creditworthiness, and genuineness of the transaction?
Sections Cited
68, 143(1), 143(2), 142(1), 132, 132(4), 133(6), 131, 144
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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to:
1. 1. अपील र्थी / The Appellant; प्रत्यर्थी / The Respondent 2.