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Facts
The assessee filed its return of income for AY 2013-14. The Assessing Officer reopened the case and made an addition under Section 68 of the Income-tax Act, 1961, for Rs.3,44,81,726/- on account of an alleged unaccounted income from a loan transaction. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal held that the onus to prove the transaction as bogus lies with the Assessing Officer, and in this case, the Assessing Officer failed to meet this burden. The Tribunal found that the assessee provided necessary documents and the loan amounts were duly repaid with interest after TDS deduction. Therefore, the addition made by the Assessing Officer could not be sustained.
Key Issues
Whether the addition made under Section 68 of the Income-tax Act, 1961, for alleged unaccounted income from a loan transaction is sustainable when the Assessing Officer failed to prove the transaction as bogus and the assessee provided documentary evidence and repayment proof.
Sections Cited
68, 143(3), 147, 250
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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-SHRI SIDDHARTHA NAUTIYAL
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER & 1516/Ahd/2025 (Assessment Year: 2013-14 & 2015-16) Budhiman Enterprise Pvt Ltd, The Income-Tax Officer, Vs. 108, Abhinav Arcade, Ward 1(1)(1), Nr. Kothawala Flats, Pritamnagar, Ahmedabad Paldi, Ahmedabad-380006 [PAN : AAACB 6343 A] (Appellant) .. (Respondent) Appellant by : Shri Tushar Hemani, Sr. Advocate Respondent by: Shri Abhijit, Sr. DR Date of Hearing 18.09.2025 Date of Pronouncement 25.09.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
These two appeals have been filed by the Assessee against the order dated 14.05.2025 passed by the Ld. Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre, Delhi (“Ld. CIT(A)” for short), under Section 250 of the Income-tax Act, 1961 (“the Act” for short), relating to the Assessment Years 2013- 14 & 2015-16.
As the issues involved in both the appeals are identical, they were heard together and are being disposed of vide this common order for the sake of convenience. We shall take AY 2013-14 as lead case for the purpose of adjudication.
The brief facts of the case are that the assessee is a company incorporated on 27.02.1986 under the Company Act, 1956 and filed its return of income for the Assessment Year 2013-14 on 28.09.2013 declaring total income at Rs.19,27,710/- . The Assessing Officer completed the assessment u/s 143(3) of the Act vide order dated 19.10.2015. Subsequently, the case was reopened u/s 147 of the Act and the Assessing Officer completed the assessment by making an impugned addition & 1516 Ahd 2025 Budhiman Enterprise Pvt Ltd Vs. ITO Asst. Year : 2013-14& 2015-16 - 2– of Rs.3,44,81,726/- u/s. 68 of the Act on account of unaccounted income as the assessee failed to explain the genuineness of the transaction.
Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), after considering the submissions of the assessee and relying on various decisions of the various courts/tribunal, dismissed the appeal filed by the assessee.
Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.
Before us, the Ld. AR submitted that the transaction with the transaction in dispute is unsecured loan transaction which has been repaid and the details are as under:-
Appellant - Buddhiman Enterprise Pvt. Ltd. Reconciliation of amounts adopted for addition by the department AY 2013-14 Refer: Confirmation ledger at P/B Pg. 66 Particulars Amount (Rs.) Receipt of loan 2,25,00,000 Add: Interest paid on loan 11,00,959 Add: Repayment of loan 1,09,90,863 Less: TDS paid on interest on loan -1,10,096 Amount adopted by department 3,44,81,726 AY 2014-15 Particulars Amount (Rs.) Interest paid on loan 11,25,000 Less: TDS paid on interest on loan -1,12,500 Amount adopted by department 10,12,500 AY 2015-16 Refer: Confirmation ledger at P/B Pg. 78 Particulars Amount (Rs.) Interest paid on loan 10,20,205 Add: Repayment of loan 1,44,30,684 Less: TDS paid on interest on loan -1,02,021 Amount adopted by department 1,53,48,868 & 1516 Ahd 2025 Budhiman Enterprise Pvt Ltd Vs. ITO Asst. Year : 2013-14& 2015-16 - 3–
The assessee has diligently provided all necessary documents, including ledger accounts, bank statements, and TDS challans, to substantiate the legitimacy of the transaction. It is crucial to emphasize that the onus to prove the transaction as bogus lies with the Assessing Officer. However, it is evident that the Assessing Officer has failed to meet this burden. The Revenue Authorities solely relied on statements from various individuals and findings from the Investigation Wing without providing concrete evidence to support the allegation of the transaction being bogus. Having gone through the facts on record, we hold that the addition made by the Assessing Officer cannot be sustained as no evidence has been brought by the Assessing Officer and the loan amounts have been duly repaid along with interest after deduction of TDS.
In the result, both the appeal of the assessee are allowed.