The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) upheld the Commissioner of Income Tax (Appeals) [CIT(A)] order, dismissing the Revenue’s challenge on the unexplained loan repayment of Rs. 1.04 Crore, based on bank statement evidence confirming the repayment transactions.
The Revenue-appellant has filed this appeal against the National Faceless Appeal Centre ( NFAC ) order dated 14.05.2024 in the case of Aman Enterprise, respondent-assessee, for assessment year (AY) 2018-19. The assessee, engaged in construction, had filed a Nil income return, but scrutiny under Computer Assisted Scrutiny Selection ( CASS ) flagged issues in income accounting for high closing stock.
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The assessment, completed under Section 143(3) on 04.02.2021, determined total income at Rs.10,22,11,440/- with additions for understated receipts (Rs.8,77,60,800/-), overstated purchases (Rs.39,52,298/-), and unaccounted expenditure (Rs.1,04,98,344/-).
Dissatisfied with the Assessing Officer ( AO )’s order, the assessee appealed to the First Appellate Authority ( FAA ), which decided in favor of the assessee through the impugned order. The revenue appealed before the tribunal aggrieved by the order of the CIT(A).
The issue was the addition of Rs. 1,04,98,344/- for unexplained expenditure. The AO noticed that loan repayments of Rs. 1,48,98,334/- did not match the bank statement, where only Rs. 44,56,543/- was shown.
The AO treated the difference of Rs. 1,04,98,344/- as unexplained and deemed it income under section 69C. The Commissioner of Income Tax ( Departmental Representative ) [CIT-DR] argued that the addition was made because the assessee could not explain the source of the repayment. The CIT(A) allowed relief by admitting additional evidence without giving the AO a chance to respond.
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The two-member bench comprising T.R. Senthil Kumar ( Judicial Member ) and Narendra Prasad Sinha ( Accountant Member ) considered the submissions from both sides. The AO made the addition because the assessee couldn’t match the total loan repayment of Rs. 1,48,98,334/- with the bank statement. However, the CIT(A) found that the entire repayment was reflected in the bank statement.
The assessee explained that all loan repayments were made through bank accounts and provided bank statements from Vijay Bank and Central Bank of India to the CIT(A). The CIT(A) concluded that payments were made through the bank, supported by a chart of loan repayments based on the bank statements already submitted to the AO.
The Revenue did not challenge this finding. Since the Revenue did not provide any evidence to dispute the CIT(A)’s conclusion, the bench found no reason to interfere with his order. The Revenue’s ground was dismissed.
In short, the appeal filed by the revenue was dismissed.
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