ITA No.674/Mum/2024

Parties Involved

Facts Summary

The assessee firm, M/s. Amal Corporation, is engaged in the business of investment in shares/securities/properties and also carries on business as contractors, designers, developers of immovable properties and providing consultancy. The firm filed its income tax return declaring income of Rs.3,36,09,110/- for the Assessment Year 2012-13. During the assessment proceedings, the Assessing Officer (AO) noted that the assessee had taken unsecured loans from M/s. Mehul Gems Pvt. Ltd. and M/s. White Stone aggregating to Rs.1,50,00,000/-. The AO also noted that the assessee had paid interest to M/s. Nice Diamonds on an unsecured loan availed prior to the Assessment Year 2012-13. The AO found that these parties were involved in providing accommodation entries and bogus purchases. The AO made additions of Rs.1,50,00,000/- for unsecured loans and Rs.28,90,574/- for interest payments. The Commissioner of Income Tax (Appeals) deleted these additions, and the Revenue appealed against this order.…

Legal Issues

• 1. Whether the addition made by the AO for unsecured loans and interest payments is justified?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

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