Income Tax Officer-27(3)(1), Mumbai - 400706 Vs. Savla Associates

Parties Involved

Facts Summary

The assessee, Savla Associates, a resident partnership firm, filed its return of income for the assessment year 2020-21 declaring a loss of Rs.3,74,132/-. The return was selected for scrutiny, during which the Assessing Officer (AO) noticed that the assessee had taken an unsecured loan of Rs.5,54,00,000/- from 37 creditors. The AO called upon the assessee to provide evidence to prove the identity, creditworthiness of the creditors, and the genuineness of the transactions. Although the assessee provided various documents, the AO was not fully convinced and added the loan amount to the assessee's income under section 68 of the Income Tax Act, 1961, treating the transactions as non-genuine. The assessee contested this addition before the First Appellate Authority, which deleted the addition after verifying the evidences and materials on record, finding the assessee had established the identity, creditworthiness of the creditors, and genuineness of the transactions.…

Legal Issues

• 1. Deletion of addition of Rs.5,54,00,000/- made under section 68 of the Income Tax Act, 1961

Judgment Outcome

Decided in favour of Assessee.

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