By Ajay R. Singh
Advocate
3 The Principal Commissioner of Income Tax-25 vs. Aarhat Investments [Income Tax Appeal No. 156 of 2018; A.Y. 2009-10; Date of order: 25th March, 2022 (Bombay High Court)]
Sec 68 – unsecured loans - Enquiry conducted by AO - identity and creditworthiness of the creditors and the genuineness of transaction establishedThe assessee received a sum of R7,00,00,000 from Wall Street Capital Markets Pvt. Ltd., a sum of R6,50,00,000 from Novel Finvest Pvt. Ltd., a sum of R5,07,68,100 from one Ganesh Barter Pvt. Ltd. and a sum of R13,50,00,000 from one Asian Finance Services. Admittedly, the amount of R7,00,00,000 received from Wall Street was repaid in the same year. Likewise, the amount received from Novel Finvest was also repaid in the same year. So also in the case of Asian Finance Services. In the case of Ganesh Barter, there was an amount outstanding at the close of the assessment year. There seems to be no issue regarding the amount received and paid back to Asian Finance Services.
The Ld. Assessing Officer had added the remaining three amounts mentioned above u/s 68 of the Act, on the basis that substantial amounts have been received by the assessee as unsecured loans and without being charged any interest. Therefore, the Assessing Officer had proceeded on the assumption that this must be the assessee’s own money circulated through the three entities mentioned above.
The Commissioner of I
