The Division Bench of Orissa High Court has upheld the addition made upon unsecured loan as the petitioner had failed to file an affidavit for proving the repayment of loan.
The Income Tax Appellate Tribunal (ITAT) had sent back matter to the AO to check the genuineness of the transaction to verify whether the assessee Unideep Food Processing (P) Ltd, had repaid the loan amounts to the alleged creditors by calling the creditors and delete the penalty as per law after giving reasonable opportunity to the assessee.
but the Assessee failed to produce the 200 odd farmers from whom the Assessee had borrowed an unsecured loan of amounts. Since the assessee has failed to comply with the direction of the Hon’ble ITAT, the AO had no other alternative but to consider the loans as unexplained and made addition.
Prajnaraj Mohanty, on behalf of the assessee in support of Commissioner of Income Tax v. Bharat Engineering & Construction Co submitted that the Supreme Court had declined to interfere with the finding of the ITAT that the assessee could not have possibly borrowed the huge amounts sought to be added as unexplained cash credit and the Supreme Court deferred to the finding of the ITAT on facts.
The Division Bench of Justice S. Muralidhar (Chief Justice) and Justice M.S. Raman (Judge) dismissed the appeal holding that the court was unable to find any substantial question of law arising from the impugned order of the ITAT.
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