Bombay HC Conducts Emergency Hearing from CJ’s Residence as Court Staff Deployed for Elections  ||  Madras HC: Preventive Detention Laws are Draconian, Cannot be Used to Curb Dissent or Settle Politics  ||  HP HC: Mere Interest in a Project Cannot Justify Impleading a Non-Signatory in Arbitration  ||  J&K&L HC: Women Accused in Non-Bailable Offences Form a Distinct Class Beyond Sec 437 CrPC Rigour  ||  Bombay HC Restores IMAX’s Enforcement of Foreign Awards Against E-City, Applying Res Judicata  ||  Supreme Court Upholds Cancellation of Bail For Man Accused of Assault Causing Miscarriage  ||  J&K&L High Court Invalidates Residence-Based Reservation, Citing Violation of Article 16  ||  Kerala HC Denies Parole to Life Convict in TP Chandrasekharan Murder Case For Cousin's Funeral  ||  High Court Grants Bail to J&K Bank Manager in Multi-Crore Loan Fraud Case, Emphasizing Bail As Rule  ||  J&K HC: Civil Remedy Alone Cannot Be Used To Quash Criminal Proceedings in Enso Tower Case    

Balaji Janakiraman, Chennai vs. ACIT - (Income Tax Appellate Tribunal) (21 Dec 2022)

Sum received from creditors cannot be regarded as unexplained credit/ income of the assessee

MANU/IX/0883/2022

Direct Taxation

Present appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), and pertains to assessment year 2013-14. The Learned CIT(A) rejected the arguments of the assessee and sustained the additions made towards unsecured loans and consequential interest paid on said loans.

The assessee submitted that, the Learned CIT(A) erred in appreciating the fact that all loans have been taken through proper banking channel and further, the creditors have appeared before the AO in response to summons issued under Section 131 of the Act, and admitted to have paid loans to the assessee.

The assessee has satisfactorily explained the identity, genuineness of transaction and creditworthiness of loan creditors. The AO without appreciating the fact simply made additions to part of loan taken from creditors, even though, he has accepted the fact that the assessee has filed all evidences to prove identity of the creditors. It is a well settled principle of law by the decision of various courts, including the decision of the Supreme Court in the case of CIT v. Lovely Exports Pvt. Ltd., that once name and address of creditors are furnished to the AO, then, it is for the AO to proceed in accordance with law to re-open the assessment of creditors, but sum received from creditors cannot be regarded as unexplained credit/ income of the assessee.

In present case, the assessee has furnished all evidences to prove the identity of creditors and also satisfactorily explained the genuineness of transactions and creditworthiness of creditors. Therefore, the AO is erred in making additions towards unsecured loans from '7' parties amounting to Rs.79,90,000 and thus, the is directed AO to delete the additions made towards loans. Appeal filed by the assessee is allowed.

Tags : ASSESSMENT   ADDITIONS   LEGALITY  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved