AFTAB CONSTRUCTIONS,MUMBAI vs. INCOME TAX OFFICER WARD 41(4)(1), MUMBAI

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ITA 5668/MUM/2025Status: DisposedITAT Mumbai02 December 2025AY 2018-19Bench: SHRI SAKTIJIT DEY (Vice President), MS PADMAVATHY S (Accountant Member)1 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee failed to provide substantive proof of the genuineness of the loan transactions, relying only on ITR acknowledgments and loan confirmations. While upholding the lower authorities' findings, the Tribunal, in the interest of natural justice, remitted the issue back to the Assessing Officer for fresh consideration, allowing the assessee one more opportunity to furnish complete details.

What were the facts?

The assessee, a partnership firm, received unsecured loans amounting to Rs. 44,56,500/-. The Assessing Officer treated these loans as unexplained cash credit under Section 68 of the Income Tax Act, 1961, for Assessment Year 2018-19. The assessee appealed to the CIT(A) and subsequently to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

Whether the unsecured loans received by the assessee were genuine and adequately substantiated to avoid addition under Section 68 of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 68,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, MUMBAI

Before: SHRI SAKTIJIT DEY, VP &

For Appellant: Shri Bharat Gandhi, AR
For Respondent: Shri Surendra Mohan, Sr. DR

(Assessment Year: 2018-19) Aftab Construction, ITO, Ward-41(4)(1), Plot No. 3, B-14, Vaishali Nagar, Kautilya Bhavan, S.V. Rod, Jogeshwari West, Vs. Bandra Kurla Complex, Mumbai-400102. Bandra (E), Mumbai-400051. PAN: AAAFA2080J Assessee) : Revenue) Assessee by : Shri Bharat Gandhi, AR Revenue by : Shri Surendra Mohan, Sr. DR 17.11.2025 Date of Hearing : : 02.12.2025 Date of Pronouncement O R D E R

Per Padmavathy S, AM:

1.

This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre (NFAC), Delhi [In short 'CIT(A)'] passed under section 250 of the Income Tax Act, 1961 (the Act) dated 11.07.2025 for Assessment Years (AY) 2018-19. The assessee raised the following grounds:

1. The learned Assessing Officer has erred both in law as well as in facts in making addition of Rs. 44,56,500/- by treating the amount of unsecured loans received by the assessee as unexplained cash credit u/s 68 of the Act without appreciating the Aftab Construction provisions of section 68 in this regard and without appreciating the fact that assessee has entered into genuine transaction with its loan creditors and complete details of loans received were submitted by the assessee during the course of assessment proceedings and has also complied with the requirements of section 68 of the Act.

2. The assessee is a partnership firm and filed the return of income for AY 2018-19 on 19.10.2018 declaring a total income of Nil. The case was selected for scrutiny and the statutory notices were duly served on the assessee. During the course of hearing, the Assessing Officer (AO) called on the assessee to furnish details pertaining to the unsecured loans. The AO completed the assessment by adding the entire amount of unsecured loan amounting to Rs. 44,56,500/- as addition u/s. 68 for the reason that the assessee has not furnished the entire details pertaining to the unsecured loans. Aggrieved the assessee filed further appeal before the CIT(A). Before the CIT(A), the assessee responded to only one of the four notices issued by the CIT(A). The CIT(A) after considering the submissions of the assessee held that “7.1.2 On careful perusal of the submission of the appellant with respect to loan creditors made during the appeal proceedings copy placed below for ready reference, it is noticed that the appellant has simply filed copy of ITR V-acknowledgment of the ROI filed by the respective loan creditor and the stereotype loan account confirmation from the loan creditor along with the table prepared by the appellant indicating the amount of loan received / paid with opening and closing balance for the relevant year. These details it has already filed before the AO and AO after examining them made the addition of loan creditors as unexplained cash credit because the appellant failed to furnish the copy of agreement or document indicating the purpose of loan, or the document establishing the genuineness of the loan transaction as stated in the para 4 of the assessment order.

7.1.3 Even now the appellant filed the same set of documents i.e. loan account confirmation and copy of ITR V- acknowledgment of the roi filed by the respective loan creditor and has not filed the bank account copy, copy of the loan agreement or any other relevant document which could substantiate the genuineness of the impugned loan transaction. In fact it has not furnished the detail of having the loan repaid or not as on date with evidence. Further on perusal of the ITR V Aftab Construction acknowledgement it is noticed it shows in most of the persons a very low income of Rs. nil as against the claim of lending loan amount of manifold. The income of loan creditors as shown in ITR V and the amount claimed to have been lent to the appellant is given below: Sl.no. Loan creditor Total income as Loan claimed to have been lent to the Appellant Rs. per ITR V Rs. Opening Addition Repayment Closing balance balance 1 Dr Parvez ITR V not 27,00,000 2,50,000 29,50,000 Khan submitted by assessee 2 Krrish 0 71,39,000 22,50,000 93,89,000 Infraspace LLP 3 Mahnaz Salim 282250 (YY) 5,00,000 5,00,000 Sharaf 2019-20) 4 Mustaq 349980 8,50,000 8,50,000 Hasham Qureshi 5 Orbit Eye ITR V not 1,00,000 1,00,000 Hospital submitted by assessee 6 Parth 0 4,06,500 11,00,000 34,79,500 Paritosh Merchant 7 Samer MD 350000 1,00,000 1,00,000 Hasham Qureshi Total 44,56,500 7.1.4 From the above table it is clear that without the substantive proof, mere ITR V acknowledgement copy and loan confirmation from creditor failed to prove the genuineness of the loan transaction. Therefore, the amount of Rs. 44,56,500/-claimed to be the genuine loan by the appellant remains unexplained even during the appeal proceedings. Therefore, the addition made by the AO u/s 68 is upheld and the ground 2 of the appellant is dismissed.”

3.

We heard the parties and perused the material on record. During the course of hearing the ld. AR submitted the bank statement of the assessee reflecting the loan transactions to submit that one of the reasons for the CIT(A) to confirm the addition is that the assessee has not furnished the bank statements. The ld. AR submitted that the other allegations for sustaining the addition u/s. 68 can be Aftab Construction countered by the assessee, if given one more opportunity. The ld. DR on the other hand argued that the assessee has not proved the creditworthiness or the genuineness of the loan and therefore the order of the CIT(A) should be upheld. From the perusal of the orders of the lower authorities, we notice that before the AO and the CIT(A) the assessee has not furnished the full details to substantiate the creditworthiness and the genuineness of the loan. Therefore there is merit in the contention that the assessee has not fully discharged the onus. However, the assessee has furnished the details such as the ITR, loan confirmation etc. of the loan creditors and the lower authorities have not examined the said details and have not recorded any adverse finding with regard to the documents filed. The bank statements now filed before us reflecting the loan transactions also needs factual verification. Considering the facts and circumstances peculiar to the assessee's case and in the interest of natural justice and fair play, we are inclined to give one more opportunity to the assessee to represent the case properly before the lower authorities. Accordingly, we are remitting the appeal back to the AO for considering the impugned issue afresh by calling for relevant details to decide the issue in accordance with law. The assessee is directed to submit the details as may be called for to substantiate the creditworthiness and the genuineness of the loan and co-operate with the assessment proceedings. It is ordered accordingly.

4.

In result, the appeal of the assessee is allowed for statistical purposes.

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