₹14 Lakh Cash Loan Addition Deleted: ITAT Holds Seized Cheques Belong to Director Personally, Not Metarolls Ispat [Read Order]
ITAT deleted ₹14 lakh addition under section 69A, holding that seized cheques belonged to the director personally and not to Metarolls Ispat Pvt. Ltd.
![₹14 Lakh Cash Loan Addition Deleted: ITAT Holds Seized Cheques Belong to Director Personally, Not Metarolls Ispat [Read Order]](https://images.taxscan.in/h-upload/2025/08/22/2079211-unexplained-cash-loan-seized-cheques-case-taxscan.webp "₹14 Lakh Cash Loan Addition Deleted: ITAT Holds Seized Cheques Belong to Director Personally, Not Metarolls Ispat [Read Order]")
The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has deleted an addition of ₹14 lakh made under section 69A of the Income Tax Act, 1961 on account of alleged unexplained cash loans and held that the cheques seized during search proceedings were in the personal capacity of the company’s director and not in the name of Metarolls Ispat Pvt. Ltd.
The assessee-respondent, Metarolls Ispat Pvt. Ltd., engaged in the business of manufacturing steel products such as MS Billets and TMT Bars, filed its return of income on 26.12.2020, declaring a total income of ₹19,48,06,480. The return was processed under section 143(1), and the case was selected for complete scrutiny.
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During the course of a search and seizure action, certain loose papers were found and seized which contained details of cheque numbers for ₹14 lakh. The Assessing Officer (AO) treated these as representing cash loans received by the assessee-company, and added ₹14 lakh as unexplained money under section 69A of the Act.
On appeal, the Commissioner of Income Tax (Appeals) (CIT(A)) confirmed the addition and held that the assessee had not produced any evidence to substantiate its claim that the entries did not belong to it.
Before the Tribunal, the assessee argued that the seized cheques did not concern the company but were issued in the name of its director in his personal capacity, and therefore the addition in the company’s hands was unjustified.
The Bench comprising R.K. Panda (Vice President) and Astha Chandra (Judicial Member) observed that the cheques in question were indeed found to be in the name of the director, and there was no material on record to show that the alleged loan was related to the assessee-company.
The Tribunal held that since the cheques were in the name of the director in his capacity and not in the name of the assessee-company, the addition made by the AO and sustained by the CIT(A) cannot be upheld.
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Accordingly, the ITAT deleted the addition of ₹14 lakh made under section 69A.
The assessee was represented by Rahul Kaul along with Anand Partani and Darshan Gattani, while Amol Khairnar along with Ramnath P. Murkunde, represented the department.
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