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Facts
The assessee received unsecured loans totaling Rs. 34,50,000, which were accepted by the Assessing Officer (AO) under section 143(3) after inquiry and confirmation of ITRs from the loan parties. The case was later reopened based on information from another party's search, leading to an addition under section 40a(ia) for non-deduction of TDS.
Held
The Tribunal held that since the loans were already examined and accepted during the regular assessment under section 143(3) with supporting confirmations, and no contrary material was brought on record, the reopening and subsequent addition were not justified. The ITAT found that all loan inquiries were done in the same assessment proceeding.
Key Issues
Validity of reopening of assessment for loans already accepted in regular assessment; justification for addition under section 40a(ia) based on later information without contrary evidence.
Sections Cited
143(3), 40a(ia)
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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: DR. B.R.R. KUMAR, VICE-MS SUCHITRA RAGHUNATH KAMBLE
O R D E R
PER DR. B.R.R. KUMAR, VICE-PRESIDENT:
This appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [hereinafter referred to as “Ld. CIT(A)”] dated 05.03.2025, under section 250 of the Income-tax Act, 1961 [in short “the Act”] for the Assessment Year 2012-13.
Heard arguments of both parties and perused the record. In this case, the addition of Rs.34,50,000/- on account of unsecured loan received from the assessee. In the present case, the assessment under section 143(3) has been conducted on 11.12.2014 wherein vide inquiry dated 20.10.2014 (Page 8 of the paper book), the then Assessing Officer duly inquired about the loan received by Asst. Year: 2012-13 - 2– the assessee. The assessee had taken bogus accommodation entries for the following persons, which are as under:
Sr. No. Name Amount 1 Anjana S. Trivedi 5,00,000 2 Jignesh Bhatt HUF 5,00,000 3 Purnima Jani 5,00,000 4 Ramesh Jani 4,50,000 5 Rasik K. Raval HUF 5,00,000 6 Shakuntala Rawal 5,00,000 7 Shantaben Rawal 5,00,000 Total 34,50,000
The assessee has filed duly reply along with the confirmation of ITRs of the loan parties (Page 15 of paper book) and having gone through the confirmations of ITRs, the then Assessing Officer has accepted the loan received by the assessee and no addition has been made. Further, the case of the assessee has been examined again by re-opening the order has been passed on 29.07.2016 reading the re-assessment inquiries, this deduction about the loans as well as the factum on non-deduction of TDS at the interest payment. The addition has been made under section 40a(ia) for non-deduction of TDS accepting the loan by the assessee. However, going to search in the case of Mr. Vipul Vidur Bhatt on 05.02.2016 based on his statement that Mr. Vipul Vidur Bhatt containing seven entities which are used to extend loans to different parties. Based on this information, the case of the assessee has been re-opened.
Before us, Ld. Counsel submitted that the name of the lenders of the assessee have not been proved by Mr. Vipul Vidur Bhatt, but the reference was merely through round of proceedings disregarding the proceeding. We find that these consequences of events and all three rounds are done in the assessment for the same loans. Since the loans have been examined during the regular assessment Asst. Year: 2012-13 - 3– under section 143(3) proceedings in absence of any other material and in the persons of said confirmations, no contrary view can be taken. In the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed. The order is pronounced in the open Court on 23.01.2026.