ITAT Remands Rs 37.55 Lakh Unsecured Loan Addition for Fresh Adjudication:

The dispute arose from an addition of Rs 37,55,000 made by the AO under Section 68 of the Income Tax Act, 1961, towards unsecured loans received from six parties during Assessment Year 2022-23. During the assessment proceedings, the AO observed that the assessee had furnished Aadhaar details in respect of three creditors and income tax return details for two creditors. However, according to the AO, the assessee had not furnished sufficient supporting information to establish the genuineness of the transactions and creditworthiness of the lenders.

Accordingly, the AO treated the entire unsecured loan amount of Rs 37.55 lakh as unexplained cash credits under Section 68 and subjected it to tax under Section 115BBE of the Act. The CIT(A) Confirmed the Addition.

The Tribunal took note of the fact that the assessee had specifically requested a personal hearing, either through video conferencing or in person, but the CIT(A) had not provided the same. Considering the circumstances, the Tribunal held that the assessee should have been afforded an opportunity of personal hearing to properly present its case and substantiate the loan transactions.

Without expressing any final opinion on the merits of the addition, the Tribunal considered it appropriate to restore the matter to the file of the CIT(A) for fresh examination. Accordingly, the Tribunal set aside the order passed by the CIT(A) and remanded the matter for fresh adjudication on merits.