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Facts
The revenue appealed against the CIT(A)'s order deleting the addition of ₹1.85 crores and ₹49.55 lacs treated as unexplained income. The assessee received these amounts as interest-free loans from Bipasa Vyapaar Pvt. Ltd. and M/s Aradhana Goods Pvt. Ltd. respectively. The Assessing Officer's notices for details were returned unserved, leading to the addition.
Held
The Tribunal held that the assessee had submitted confirmation of amounts, balance sheets, Profit and Loss accounts, and bank statements of the lenders. The loans had been repaid, and as they were no longer continuing liabilities, there was no purpose in conducting a postmortem study. No specific error was found in the CIT(A)'s order.
Key Issues
Whether the addition of interest-free loans as unexplained income was justified when the loans were subsequently repaid and documentation was provided.
Sections Cited
133(6)
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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI GEORGE MATHAN & SHRI RATNESH NANDAN SAHAY
Assessee represented by Sri Nitin Kumar Pasari, A.R. Department represented by Shri Khub Chand Pandya, Sr.DR Date of hearing 10/06/2025 Date of pronouncement 10/06/2025 O R D E R PER: BENCH 1. This is an appeal filed by the revenue against the order of the learned CIT(A), Jamshedpur in appeal No. CIT(A), Jamshedpur/10363/2017-18 dated 28/08/2020 for the A.Y. 2015-16.
Shri Khub Chand Pandya, ld. Sr.DR is represented on behalf of the revenue and Shri Nitin Kumar Pasari, ld A.R. is represented on behalf of the assessee and.
It was submitted by the ld. Sr.DR that during the impugned assessment year 2015-16, the assessee had received ₹ 1.85 crores as interest free loan from Bipasa Vyapaar Pvt. Ltd. and an amount of ₹ 49.55 lacs from M/s Aradhana Goods Pvt. Ltd.. It was a submission that in the course of assessment, the Assessing Officer had issued notices under Section 133(6) and also called for details in respect of the said unsecured loans. The notices returned unserved. It was a submission that consequently, the Assessing Officer treated the same as DCIT Vs Jai Mangla Sponge Iron P Ltd. unexplained income of the assessee and held that the said two concerns were paper transactions. It was a submission that on appeal, the ld. CIT(A) had deleted the addition on the ground that the assessee had produced the returns of income of the two lenders and their balance sheets, Profit and Loss account accounts and relevant bank statements. It was a submission that as the creditworthiness of the two lenders were not proved, the addition as made by the Assessing Officer is liable to be confirmed and the order of the ld. CIT(A) reversed.
In reply, the ld. AR of the assessee drew our attention to the paper book filed wherein at page 46 is the confirmation of amounts wherein in respect of Bipasa Vyapar Pvt. Ltd., an amount of ₹ 1.85 crores has been shown. This amount has been repaid between 06/10/2020 and 08/10/2020. It was a submission that the loans have also been repaid to the said two concerns. In respect of Aradhana Goods Pvt. Ltd. also, the amount has been repaid on 06/10/2020 admittedly without any interest. It was a submission that the amounts have also been returned, the same should not be now treated as unexplained income of the assessee.
We have considered the rival submissions. A perusal of the order of the ld. CIT(A) shows that the ld. CIT(A) has considered the balance sheet, Profit and Loss account and the bank transactions in respect of two lenders. Before us also, the assessee has placed the ledger accounts showing the repayment of the said two interest free loans. As loans no more continuing in the hands of the assessee. There is no purpose in doing a postmortem study in respect of the two transactions. This being so as no specific error has pointed out in the order