ZEBRA NETWORKS PRIVATE LIMITED,MUMBAI vs. INCOME TAX OFFICER, AAYAKAR BHAWAN, MUMBAI

PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2018-19 arises out of the order of Learned National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 31.03.2025 in the matter of assessment framed by National e-assessment center r [hereinafter “AO”] u/s. 143(3) r.w.s 143(3A) & r.w.s 143(3B) of the Income-tax Act, 1961 (hereinafter “the Act”) dated 06.04.2021. 2. There is a delay of 131 days in filing the appeal by the assessee. The assessee has filed condonation petition/affidavit stating the Zebra Networks Private Limited :- 2 -:

reasons for delay in filing the appeal as not being able to access the email and prayed to condone the delay in filling the appeal. We have considered the affidavit filed by the assessee and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit, and accordingly condone the delay.
3. The assessee has filed return of income showing loss of Rs.
59,17,484/-. The A.O has made addition of loan credit of Rs
5,91,06,004/- from M/s Trio Assets Pvt. Ltd. and Rs.3,98,67,406/- from M/s Alko Plus Producers Pvt. Ltd u/s 68 of the Act in the assessment order passed u/s 143(3) of the Act. The A.O in the assessment order has observed that, there was a considerable increase in short term borrowing raised during the year under consideration and therefore show cause was issued to prove identity, creditworthiness of the lenders and genuineness of the transaction. The assessee, in response to notice issued has submitted confirmation,
ITR acknowledgement and financial statements of M/s Trio Assets Pvt. Ltd.
and M/s Alko Plus Producers Pvt. Ltd. However, the A.O did not accept the loan credit on two accounts. First, that the lender companies have shown loss in their return and therefore do not have the capacity and second that the assessee has not submitted the copy
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of its bank statement of self and the lender and therefore, genuineness is not proved.
4. The A.O has also disallowed the claim of expenditure to the extent of Rs. 12,64,743/- relating to telephone expenses, printing and stationery, for the reason that the assessee has not submitted any documentary evidences and it has not carried out any business activities.
5. The A.O has also disallowed the claim of expenditure to the extent of Rs. 12,64,743/- relating to telephone expenses, printing and stationery, labour charges, miscellaneous expenses and transport charges on the ground that assessee has failed to substantiate its claim with supporting documentary evidences and also that company is not doing any business activities during the year. On appeal the Ld.
CIT(A) dismissed the appeal ex-parte as assessee has not responded to the 3 notices issued during the appellate proceeding.
6. At the outset, the Ld. Authorized Representative (A.R.) has submitted that the A.O has made the addition u/s. 68 in response to two lenders for the reason that the lender company has shown loss in the return of income. The Ld.AR submitted that the A.O has not considered the financial statement submitted before financial statement of the lender company showing with examining the balance
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sheet that the M/s Trio Assets Pvt. Ltd. had net asset of Rs.
59,76,28,668/- as of 31.08.2018 and M/s Alkoplus Producers Pvt. Ltd.
had the asset of Rs. 52,72,88,122/-. The Ld.AR further submitted that the A.O never asked for the bank statement of the assessee and the lender company and held transaction not genuine without giving any opportunity. The Ld. AR has now submitted copy of bank statement of his and the lender companies and prayed that the matter may be sent back to A.O to examine the bank entry to establish the genuineness.
7. The Learned Departmental Representative (Ld. D.R) on the other hand relied on the orders of the lower authorities and requested that the appeal be dismissed.
8. We have considered the rival submission and perused the material on record. The A.O. has made the addition u/s.68 in respect of loan credit of Rs. 5,91,06,004/- from M/s Trio Assets Pvt. Ltd. and Rs. 3,98,67,406/- from M/s Alkoplus Producers Pvt. Ltd. The assessee has submitted loan confirmation, ITR acknowledgment and financial statement of the lender company in support of the claim of the loan.
However, the Ld. CIT(A) did not accept the explanation and doubted the creditworthiness of the lenders for the reasons that the lender company have shown return loss in the year Income Tax Return the A.O also held the loan not genuine because the bank statement of the Zebra Networks Private Limited
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assessee and the lender companies were not submitted. The Ld.AR has submitted that the A.O never called for these bank statement and therefore same were not submitted however, these statements are now being submitted which may be verified by the A.O. We find that M/s Trio Assets Pvt. Ltd. is the company with authorized capital of Rs.
2,00,00,000/- and has balance sheet total of Rs. 60,67,58,914/- as on 31.03.2017 and similarly M/s Alco Plus Pvt. Ltd. has total balance in the balance sheet of Rs. 55,87,00,430/- as on 31.03.2017 and accounts are audited by charted accountant. We do not concur with the view of Ld.AO with merely because there is loss of return the capacity of lender is not proven without examining the source of the borrowing. The A.O has held the loan not genuine merely because banks statements of lender and assessee were not submitted as assessee has now submitted the bank statement the matter is sent back to A.O to examine the bank statement.
9. The A.O has also made disallowance of expenses to the extent of Rs. 12,64,743/- on the ground that the assessee failed to substantiate its claim with supporting documentary evidences. The assessee has submitted that these expenses were claimed these expenses are regular and are fixed neither asset nor which are required for the maintenance of the company. The Ld.A.R has Zebra Networks Private Limited
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submitted that the assessee has of their evidences in its possession and therefore matter may be examined by the A.O. We accordingly, restore this issue before the A.O for the verification of the expenditure.
10. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 23rd day of December, 2025 at Mumbai. (SAKTIJIT DEY)
Vice President
Mumbai, Dated: 23rd December, 2025. Poonam Mirashi
(Stenographer)

Copy of the order forwarded to:
1. Appellant
2. Respondent
3. The CIT
4. The CIT (Appeals)
5. The DR, I.T.A.T.

By order

(Asstt.