Addition for Unsecured Loans Without PAN: ITAT Grants Partial Relief and Remands Matter for Verification of Submitted Documents [Read Order]
The Tribunal granted partial relief for certain loans where compliance was shown and remanded the addition relating to unsecured loans lacking PAN details for de novo consideration by the Assessing Officer (AO).
Unsecured - loan - taxscan
Unsecured - loan - taxscan
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) granted partial relief and remanded the matter for verification of submitted documents for the issue of addition of unsecured loans without PAN.
Jayantilal Babulal Shah (assessee) for whom the Assessing Officer (AO) reopened the case after observing the assessee. For the Assessment Year (AY) 2011-12 the AO categorized the loans, including a specific amount of ₹2,84,40,691 where the assessee had failed to furnish the PAN of the creditors. The AO made an addition ₹2.84 Cr for the loans.
Aggrieved by the AO’s order, the assessee filed an appeal before the Commissioner of the Income Tax (appeals) [CIT(A)]. The CIT(A) confirmed the addition made by the AO. Aggrieved by the CIT(A)’s order, the assessee filed an appeal before the ITAT.
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The assessee's counsel submitted PAN/ITR details, confirmations, and replies to Section 133(6) notices for these parties directly before the ITAT. However the counsel did not press with the grounds of ₹11.31 lakhs and ₹31.02 Lakh addition made by the AO.
The two-member bench comprising Dr. B.R.R.Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member) granted immediate relief for specific loans where the assessee had furnished replies in response to Section 133(6) notices.
Crucially, with respect to the remaining unsecured loans taken from other parties falling within this ₹2.84 crore bracket, the tribunal restored the matter to the file of the Assessing Officer for fresh consideration.
In the interest of justice, the tribunal allowed the AO to verify the documents related to identity and creditworthiness that the assessee had failed to provide during the original assessment and appellate proceedings. The appeal of the assessee was partly allowed for statistical purposes.
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