Prime Omkar K K Consortium vs. Income Tax Officer, Ward 25(3)(1)

Parties Involved

Facts Summary

The assessee, Prime Omkar K K Consortium, filed a revised return of income declaring a total income of Rs. 77,30,682/-. The case was selected for scrutiny under CASS, and various statutory notices were issued. The AO received information from the Investigation Wing, Mumbai, indicating that the assessee had received an unsecured loan of Rs. 1,12,00,000/- from M/s. Arihant Exports, a bogus entry provider entity controlled by Shri Bhanwarlal Jain group. A search and seizure operation revealed that Shri Bhanwarlal Jain admitted to providing accommodation entries. The assessee submitted various documents to prove the loan's genuineness, but the AO did not accept the explanation due to the admission by Shri Bhanwarlal Jain. The AO added the peak value of the unsecured loan and the interest to the total income. Aggrieved, the assessee filed an appeal before the CIT(A), which was dismissed. The assessee then filed an appeal before the Tribunal.…

Legal Issues

• 1. Whether the addition u/s 68 of Rs. 1,18,19,733/- made in the assessment order as peak credit value of an alleged bogus loan of Rs. 1,12,00,000/- taken by the Appellant from one, Arihant Exports, is erroneous.
• 2. Whether the disallowance of interest of Rs. 5,11,216/- in respect of the aforesaid loan from Arihant Exports is erroneous.
• 3. Whether the lower authorities erred in passing their respective orders without granting the Appellant an adequate opportunity of being heard.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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