ITAT Mumbai deleted additions on unexplained investments and allowed ₹2.77 crore interest deduction, rejecting department’s lack of counter-evidence.
ITAT Deletes ₹2.77 Crore Interest Disallowance, Upholds Bank Deposit Claims
ITAT Mumbai deleted unexplained investment additions under Section 69 and allowed a ₹2.77 crore interest expense claimed by the assessee. The department had added amounts based on bank credits and share acquisitions, alleging unexplained source.
The assessee provided loan agreements, repayment records, and bank statements tracing funds to legitimate borrowing. The Tribunal held that once primary evidence is placed, the burden shifts; the Revenue failed to conduct loan verification or rebut documentation. Similarly, the interest claim was supported by lender certificates and payment trails.
This decision highlights the importance of documented loan trails in defending unexplained investment charges. Practitioners must focus on paper trail completeness and invoke settled law on shifting evidentiary burden under Section 69.
