₹1.12 crore addition under Section 69A deleted as bank-recorded loans held genuine: ITAT rejects reliance on ‘Personal Tally’ [Read Order]

In a recent ruling, the Income Tax Appellate Tribunal (ITAT) Mumbai has held that the ₹1.12 crore addition made under Section 69A was unsustainable, ruling that the transactions represented genuine inter‑corporate loans duly routed through banking channels.

The bench observed that the Assessing Officer’s reliance on the seized “Personal Tally” data from the Areion Group was misplaced, as the entries were already recorded in the assessee’s books of account.

The assessee, Joynest Premises Private Limited, engaged in real estate development, had originally filed its return declaring a loss of ₹28.55 lakh. The case was reopened after a search on the Areion Group revealed a “Personal Tally” database containing alleged accommodation entries.

Based on this seized data and statements recorded under Section 132(4), the Assessing Officer treated ₹1.12 crore of inter‑corporate loan transactions between Joynest Premises and Areion Fincap Pvt. Ltd. as unexplained money under Section69A.

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The assessee contended that the transactions were genuine loans, fully documented and reflected in both parties’ audited accounts. It argued that Section 69A applies only when an assessee is found to be the owner of unrecorded money or valuable articles, which was not the case here.

The company also pointed out that the Assessing Officer failed to exercise powers under Sections 131 and 133(6) to verify the genuineness of the loans and relied solely on third‑party statements without granting cross‑examination, violating principles of natural justice.

The Tribunal observed that the funds were transferred through banking channels and duly recorded in the assessee’s books. It noted that even if the seized “Personal Tally” suggested accommodation entries, the assessee was not found to be the owner of any unrecorded money.

The bench comprising Judicial Member Rahul Chaudhary and Accountant Member Vikram Singh Yadav noted that the essential condition for invoking Section 69A, ownership of unexplained assets not recorded in books, was absent.

Rejecting the Revenue’s argument that the transactions were falsely described as loans, the Tribunal clarified that mere suspicion based on third‑party data cannot override documentary evidence of accounted transactions.

Accordingly, the tribunal deleted the addition on merits and the appeal preferred by the Assessee was partly allowed

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