Assistant Commissioner of Income Tax, Circle-3(1)(1), Ahmedabad Vs Puroshottambhai Bachubhai Pitroda

Parties Involved

Facts Summary

The assessee, Puroshottambhai Bachubhai Pitroda, is an individual engaged in the business of mining contracts. For the Assessment Year 2017-18, the assessee filed his Return of Income on 25-10-2017, declaring a total income of Rs.1,30,61,260/-. During the assessment proceedings, the assessee was requested to furnish details of unsecured loans availed from four parties amounting to Rs.91,50,000/-. The assessee provided confirmation of accounts along with bank statements and Income Tax Returns filed by the creditors. However, the Assessing Officer held that the creditors were maintaining meagre balance amounts in their bank accounts, which were not commensurate with the loan amounts given to the assessee. Thus, the Assessing Officer treated the entire loan amounts of Rs.91,50,000/- as unexplained cash credit under section 68 of the Income Tax Act, 1961, and taxed under section 115BBE of the Act.…

Legal Issues

• 1. Whether the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.91,50,000/- made by A.O. on account of unsecured loans treated as unexplained cash credit u/s. 68 of the Act.

Judgment Outcome

Decided in favour of Revenue.

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