KRUTI MANUFACTURERS AND TRADERS PVT LTD,MUMBAI vs. DCIT 6(3)(2), MUMBAI

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ITA 1532/MUM/2026Status: DisposedITAT Mumbai11 September 2026AY 2012-134 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the confirmation letter submitted by the assessee, showing a higher opening balance and debit transactions, was not considered by the Assessing Officer. Therefore, the matter was remitted back to the Assessing Officer for verification of these details.

What were the facts?

The assessee received loans totaling Rs 3,55,66,822/- from its Managing Director, Shri Deepak S. Desai, who maintained books for his proprietary business but not personal accounts. The Assessing Officer added this amount as unexplained cash credit under Section 68, finding the lender's creditworthiness and transaction genuineness unsatisfactory.

What were the issues?

Whether the Assessing Officer properly considered the creditworthiness and genuineness of the loan transaction when the lender maintained books for his business but not personal accounts. Whether the assessee discharged its onus under Section 68.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI AMIT SHUKLA & SHRI GIRISH AGRAWAL

Pronounced: 11.09.2026

INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI BENCH: E BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA 1532/MUM/2026 िनधा�रण वष�/Assessment Year: 2012-13) Kruti Manufacturers And Traders Pvt DCIT 6(3)(2) Ltd Aayakar Bhawan Churchgate 212, Fatnani Bldg, R A Kiwai Rd, Mumbai-400020, Maharashtra Vs. Wadala, Mumbai-400031, Maharashtra अपीलाथ� Assessee ��थ� Respondent

Permanent Account Number of Assessee: AADCK7699B

अपीलाथ� �ारा/Assessee represented by: Shri Kirit Sanhgvi, CA ��थ� �ारा/Respondent represented by: Smt. Sujatha Iyyanger, Sr. DR सुनवाई की तारीख / Date of conclusion of hearing: 24.06.2026 घोषणा की तारीख / Date of pronouncement: 11.09.2026 आदेश / ORDER O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by assessee is against the order of the ld. CIT (A), National Faceless Appeal Centre (NFAC), Delhi, Order No. ITBA/NFAC/S/250/2025-26/1084080919(1) dated 25.12.2025 passed against the assessment order by ld. Dy. Commissioner of Income Tax 6(3) (2), Mumbai, u/s. 143(3) of the Income-tax Act, 1961 (‘the Act’) dated 03.03.2015, for Assessment Year 2012-13.

2.

Assessee has raised the following grounds of appeal:

1) The learned CIT A NFAC erred in approving the stand taken by the AO that unless the lender maintains books of account of personal transactions non business assessee cannot explain the alleged cash credit ignoring that the lender has his proprietary business whose books of account are maintained. 2) The learned CIT A NFAC failed to appreciate that the lender in this case was the managing director of assessee company and erred in confirming the addition ignoring this vital fact. 3) The learned CIT A NFAC erred in not holding that in a CASS based selection of a case for scrutiny under section 143 1 of the Act the revenue non furnishing the reasons for selection of the case for scrutiny vitiates the assessment. 4) The learned CIT A NFAC erred on facts and in law in confirming the addition of Rs 35566822 under section 68 of the Act. 5) The learned CIT A NFAC erred on facts and in law in not appreciating that assessee had discharged the onus of proving creditworthiness of the lender under section 68 of the Act.

3.

Brief facts of the case are that assessee filed its return of income on 28.09.2012, reporting nil total income while reflecting a loss of Rs 1,53,56,815/-. During the year, assessee received loans totalling Rs 3,55,66,822/- from Shri Deepak S. Desai who is the Managing Director of the assessee company. The lender maintained accounts for his proprietary business. He did not maintain personal books of account. Assessee submitted bank statements and loan confirmations to ld. Assessing Officer. Ld. Assessing Officer noted that the lender did not produce his personal balance sheet. He was not satisfied with the creditworthiness and genuineness of the transaction. He added Rs 3,55,66,822/- as unexplained cash credit under Section 68 of the Act. Aggrieved, assessee filed an appeal before the ld. CIT(A).

3.1. At the first appellate stage, assessee submitted that the said loan was received from Shri Deepak S. Desai through banking channels through account-payee cheques. The identity of the lender was not in dispute. Confirmations and bank statements were submitted during assessment proceedings. The lender maintained books of account for his proprietary concern. Non-maintenance of personal books of account should not make the transaction non-genuine. Ld. Assessing Officer made the addition on presumptions without presenting adverse evidence, primarily in respect of establishing creditworthiness of the lender and proving the genuineness of the transaction. Assessee has placed on record a paper book containing 28 pages. The index of the paper book is as follows: Sr. No. Particulars Page No. Statement of Total Income A.Y. 1. 1 to 2 2012-13 2. Balance Sheet F.Y. 2011-12 3 to 11 Confirmation of accounts Shri 3. 12 to 13 Deepak S. Desai Statement of Total Income for Shri 4. 14 to 16 Deepak Desai 5. Balance Sheet Shri Deepak Desai 17 to 25 M/s Kruti Associates Notes to 6. 26 to 28 Accounts & Return A.Y. 2012-13

4.

Before us, ld. Counsel for the assessee referred to the confirmation letter produced before ld. CIT(A). In this confirmation letter, the opening balance itself is of Rs. 3,73,64,315/-. This document is placed at page 12 and 13 of the paper book. The addition made by the ld. Assessing Officer is of Rs. 3,55,66,822/- under Section 68. Also, there are debit transactions noted in the said document, totalling to Rs. 4,05,15,000/- resulting in a net closing balance of Rs.3,55,66,822/-. It is this closing balance which has been added by the ld. Assessing Officer. These facts of the matter have not been taken into account while making the impugned addition. Since no submission was made by assessee on this account before the ld. Assessing Officer, we find it appropriate to remit the matter back to the file of the ld. Assessing Officer. This remission is for the limited purpose of verification of the details furnished in the confirmation letter placed on record. The verification will ascertain the veracity of the amounts mentioned therein. It will more particularly verify the opening balance, which is at a higher amount than the addition made by the ld. Assessing Officer as well as the debit transactions of Rs.4,05,15,000/-. Based on the satisfaction derived from the said verification, ld. Assessing Officer is directed to consider the claim of assessee. Needless to say, assessee be given reasonable opportunity of being heard and make any further submission to substantiate its claim. Accordingly, grounds raised by the assessee are allowed for statistical purposes.

5.

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 11 September, 2026.

Sd/- Sd/- Amit Shukla Girish Agrawal Judicial Member Accountant Member Dated: 11 September, 2026 MP, Sr. PS Copy to : 1. Assessee 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT BY ORDER,

(Dy./Asstt.Registrar) ITAT, Mumbai 4

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