DEPUTY COMMISIONER OF INCOME TAX CIRCLE 3(1)(1) AHMEDABAD, AHMEBABAD vs. TECHNO INDUSTRIES, AHMEDABAD

Facts

The assessee, engaged in manufacturing, was assessed for AY 2014-15. Based on Investigation Wing information, the Assessing Officer made an addition of Rs.51,12,192/- under Section 69A r.w.s. 115BBE, treating the repayment of a loan (originally taken in FY 2011-12) as unexplained money, alleging it was a bogus accommodation entry.

Held

The CIT(A) deleted the addition, finding that the assessee provided sufficient documentary evidence (ledger accounts, bank statements, TDS certificates). The Tribunal upheld this, stating the Assessing Officer failed to discharge the onus to prove the transaction bogus, relying on generalized third-party statements without providing specific evidence or allowing cross-examination, which violated natural justice.

Key Issues

Whether the repayment of an alleged bogus loan can be added as unexplained money under Section 69A when the assessee provides documentary evidence, and the Assessing Officer relies on generalized third-party statements without specific evidence or cross-examination.