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

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

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.

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.

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 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.

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.

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.

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 :- 6 -: 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.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 23rd day of December, 2025 at Mumbai.