Loan amount received through proper Banking Channel and Confirmation Letter also filed: ITAT sets aside Addition as Genuineness of Transaction proved [Read Order]

Income Tax Appellate Tribunal (ITAT), Chennai sets aside addition as genuineness of transaction was proved by assessee as loan amount was received through proper banking channel and confirmation letter also filed.

The assessee, Smt. SelviChittiraja has filed her return of income for the assessment year 2014-15 declaring total income of Rs.14,22,000/-. During the course of assessment proceedings, the Assessing Officer noticed that the assessee has purchased house property for consideration of Rs. 2.74 crores. The Assessing Officer further noticed that the assessee claims to have purchased property out of loans taken from M/s. Aashana Enterprises, sale proceeds of house property and current year income. The Assessing Officer has accepted source for purchase of property in respect of loan taken from M/s.Aashana Enterprises through her husband account amounting to Rs.90 lakhs.

The Assessing Officer had also accepted source for purchase of property claims to have arranged from sale of house property and savings from current year income, however, rejected explanation of the assessee in respect of loan from M/s. Aashana Enterprises amounting to Rs.1,00,00,000/- on the ground that no details have been furnished to justify loan transactions with necessary evidences. Further, when summons was issued to M/s.Aashana Enterprises calling for details, there was no response from the party. Therefore, the Assessing Officer opined those loans claims to have received from M/s. Aashana Enterprises through M/s. SMJ Developers and M/s. Film Fabricators is unexplained credit and thus, added back to the total income of the assessee.

The bench consisting of V Durga Rao, Judicial Member and G Manjunatha Accountant Member held that “The genuineness of transaction is also proved, because loans have been transferred through bank account and creditworthiness of parties are not in doubt, because M/s.Aashana Enterprises has explained known source of income Therefore, we are of the considered view that the assessee has discharged her onus of proving creditworthiness by filing necessary details, including confirmation from parties.”

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