BASERA INTERIORS & BUILDERS PRIVATE LIMITED,GURGAON vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), GURGAON, GURGAON

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ITA 5484/DEL/2025Status: DisposedITAT Delhi31 August 2026AY 2014-158 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had provided sufficient evidence like confirmation copies, ITRs, and bank statements for the 8 individuals whose explanations were rejected by the CIT(A). Relying on the Delhi High Court's decision in CIT vs. Value Capital Services (P) Ltd., the Tribunal found the upholding of additions for these 8 parties unsustainable.

What were the facts?

The assessee declared an income of Rs. 50,89,030/-. The Assessing Officer made an addition of Rs. 3,94,06,534/- under Section 68 as unexplained credits. The CIT(A) partly allowed the appeal, accepting explanations for some individuals but rejecting others.

What were the issues?

Whether the additions made under Section 68 for unexplained credits were justified, considering the evidence provided by the assessee regarding the identity, genuineness, and creditworthiness of the parties.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “F”, NEW DELHI

Before: SHRI M. BALAGANESH & SHRI VIMAL KUMAR

For Appellant: Ms. Sakshi Rustogi, Advocate, Shri Shivam Yadav, Advocate
For Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Hearing: 29.06.2026Pronounced: 31.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”, NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 5484/Del/2025, A.Y. 2014-15 Basera Interiors & Builders Vs. Deputy Commissioner of P. Ltd. Income Tax, SCO-393, Sector-29, Circle-1(1), Gurgaon, Gurgaon Haryana-122002 Gurgaon �थायीलेखासं./जीआइआरसं./PAN/GIR No: AACCB8422G Appellant .. Respondent Appellant by : Sh. Salil Kapoor, Advocate, Ms. Sakshi Rustogi, Advocate, Shri Shivam Yadav, Advocate Respondent by : Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 29.06.2026 Date of Pronouncement 31.08.2026

O R D E R PER VIMAL KUMAR, JM:

The appeal filed by the assessee against order dated 22.08.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [hereinafter referred to as “the CIT(A)”] under section 250 of the Income Tax Act, 1961 (hereinafter

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referred to as “the Act”) arising out of assessment order dated 26.12.2016 of the Learned Assessing Officer / DCIT, Circle 1, Gurgaon u/s 143(3) of the Act for A.Y. 2014-15.

2.

Brief facts of the case are that the assessee filed return of income on 24.11.2014 declaring an income of Rs. 50,89,030/-. The return was processed u/s 143(1) of the Act. The case was selected for scrutiny assessment. Notice u/s 143(2) of the Act dated 28.08.2015 was issued. Notices u/s 143(2) and 142(1) of the Act along with detail questionnaire dated 23.08.2016 were issued. The supplementary questionnaire dated 08.08.2016 was issued. Shri Manoj Garg, CA submitted details produced books of accounts. On completion of proceedings, Ld. AO vide order dated 26.12.2016 made addition of Rs. 3,94,06,534/- u/s 68 of the Act being unexplained credits in the book of accounts of the assessee company.

2.1 Against order dated 26.11.2016 of ld. AO, the appellant/assessee filed appeal before Ld. CIT(A) which was partly allowed vide order dated 22.08.2025. The assessee’s explanation qua for individuals namely Kamal Jeet, Anil Jain, Sunita, Prashant Sharma were accepted while explanation pertaining to advances from Munesh Sharma, Tania Mishra, Laxmi sharma, Manoj Kumar, Ramesh Pandit Builders & Promoters pvt. Ltd. Rewa Puri, Mohit Malhotra, and kishan Lal Sardana, were rejected.

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3.

Being aggrieved, the appellant/assessee preferred present appeal on following grounds:

“1. That in view of the facts and circumstances of the case, the order passed by Deputy Commissioner of Income Tax, Circle 1(1), Gurgaon ("Assessing Officer"/ "AO") under Section 143(3) of the Income Tax Act, 1961 ("the Act") dated 26.12.2016 as partly upheld by the National Faceless Appeal Centre, Delhi ("NFAC/CIT(A)") vide order dated 22.08.2025 and the additions made therein is illegal, bad in law, without jurisdiction and void ab-initio. The additions made are erroneous, unjustified and illegal. 2. That in view of the facts and circumstances of the case, the NFAC has erred both on facts and in law in confirming the addition of Rs. 3,15,24,746/- under section 68 of the Act on account of advances received from parties alleged to be unexplained credits in the books of the assessee company and the fact that the said amount is received as advances in the normal course of business. 3. That in view of the facts and circumstances of the case and in law, the AO has failed to appreciate that the mandatory pre-conditions for invoking Section 68 of the Act, have not been fulfilled in the present case and thus the additions made are illegal, bad in law and liable to be deleted. The additions under Section 68 are illegal and not justified. 4. That in view of the facts and circumstances of the case and in law, the NFAC has erred in upholding by confirming addition on account of advance received of Rs. 35,17,346/- from Munesh Sharma from one account and Rs. 72,40,287/- being duly repaid to him in the other account maintained by the Assessee in the same year. The remaining amount was net debit balance of Rs. 37,22,941/-, therefore in a nutshell there is NIL amount of advance received from Munesh Sharma during the year under consideration. 5. That in view of the facts and circumstances of the case and in law, the NFAC has erred in upholding by confirming addition on account of advance received Rs. 29,07,000/- from Tania Mishra and that the same being duly repaid to her in tranches in A.Y. 2015-16 and Α.Υ. 2017-18. 6. That in view of the facts and circumstances of the case and in law, the NFAC has erred in upholding by confirming addition of Rs. 50,00,000/- on account of advance received from Laxmi Sharma on 03.01.2014 in respect of a property duly sold to her on 27.06.2014 during the subsequent Assessment Year. 7. That in view of the facts and circumstances of the case and in law, the NFAC has erred in upholding by confirming addition of Rs. 1,00,00,000/- on account of advance received from Manoj Kumar and the same being duly repaid to him in tranches in A.Y. 2015-16 and A.Y. 2016-17.

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8.

That in view of the facts and circumstances of the case and in law, the NFAC has erred in upholding by confirming addition of Rs. 40,00,000/- on account of advance received from Ramesh Pandit Builders & Promoters Pvt. Ltd. and the same being duly repaid in tranches in A.Y. 2016-17. 9. That in the view of the facts and circumstances of the case and in law, the NFAC has erred in upholding by confirming addition of Rs. 12,00,000/- on account of advance received from Rewa Puri which was further forfeited and shown as income in the books of the Assessee Company in A.Υ. 2017-18. 10. That in the view of the facts and circumstances of the case and in law, the NFAC has erred in upholding by confirming addition of Rs. 4,00,000/- on account of advance received from Mohit Malhotra which was further forfeited and shown as income in the books of Assessee Company in A.Y. 2016-17. 11. That in the view of the facts and circumstances of the case and in law, the NFAC has erred in upholding by confirming the addition of Rs. 45,00,000/- on account of advance received from Kishan Lal Sardana which was further forfeited and shown as income in the books of Assessee Company in A.Y. 2017-18. 12. That in view of the facts and circumstances of the case and in law, the additions have been made on mere assumptions and conjectures and the NFAC has erred in partly upholding by rejecting the explanations and evidences brought on record by the Assessee company to prove the following: the identity, genuineness and creditworthiness of the transaction. 13. That in view of the facts and circumstances of the case and in law, the AO and NFAC have grossly erred in not appreciating the submissions/documents/evidences filed by the Assessee company. That the entire assessment is based on conjectures, surmises, and assumptions without any direct evidence against the Assessee, thereby rendering the order perverse and unsustainable in law. 14. The NFAC has erred in passing an order under section 250(6) of the Act by not giving adequate opportunity of being heard, thereby violating the principles of natural justice. 15. That in view of the facts and circumstances of the case and in law, the AO has erred both on facts & in law in charging interest under section 234A, 234B and 234C of the Act. 16. That in view of the facts and circumstances of the case and in law, the AO has erred in initiating penalty under section 274 read with section 271(1)(c) of the Act.” 4. Ld. Authorized Representative for appellant/assessee submitted that Ld. CIT(A) in para No. 5.3 concluded his findings and held that explanation provided for 4 individuals namely Kamal Jeet, Anil Jain, Sunita, Prashant Sharma are satisfactory and sufficient to establish genuineness and source of credit.

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5.

In para No. 5.3.2, the explanations and documents pertaining to advances from

8 name were rejected. Ld. Authorized Representative submitted written

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6.

Ld. Authorized Representative placed reliance on following judgments:

1.

Commissioner of Income –tax v. Value Capital Services (P) Ltd. (2008) 307 ITR 334 (Delhi) 2. Commissioner of Income-tax vs. Gangeshwari Metal (P.) Ltd. (2014) 361 ITR 10 (Delhi) 3. Principal Commissioner of Income-tax v. Bairaga Builders Pvt. Ltd. [2024] Taxman 460 (Bombay) 4. Real Innerspring Technologies pvt. Ltd. vs. ACIT Central 29, Delhi ITA No. 647/Del/2023 5. Principal Commissioner of Income-tax-3 v. N.K. Industries Limited [2025] 175 taxmann.com 619 (Gujarat) 6. Principal Commissioner of Income-tax-3, Ahmedabad vs. N.K.Industries Ltd. [2025] 306 Taxman 1 (SC) 7. Ld. Departmental Representative relied on impugned order.

8.

From examination of record in light of aforesaid rival contention, it is crystal clear that Ld. CIT(A) vide impugned order dated 22.08.2025 accepted explanation qua 4 individuals and rejected explanation and documents of 8

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individuals. Ld. Authorized Representative for appellant/assessee has specifically referred to written submissions regarding 8 persons along with explanation and corresponding documents filed in the paper book. From perusal of the written submissions, it is evident that the assessee has explained the amounts which were taken and returned by referring to confirmation copies of accounts, copy of ITR, bank statements regarding each of the 8 individuals.

8.1 Hon’ble High Court of Delhi in Commissioner of Income Tax vs. Value Capital Services (P.) Ltd. (2008) 307 ITR 334 (Delhi) in para No. 5 to 7 observed as under:

“ 5. While setting aside the order of the Commissioner of Income-tax (Appeals), the Tribunal relied upon two decisions of this court, namely, CIT v. Stellar Investment Ltd. [1991] 192 ITR 287 and a Full Bench decision in CIT v. Sophia Finance Ltd. [1994] 205 ITR 98. Several other decisions have been rendered by this court following the above two decisions. The principle that has been laid down by the various decisions rendered by this court from time to time is that if the existence of the applicant is proved, normally no further inquiry is necessary. 6. Learned counsel for the Revenue subinits that the creditworthiness of the applicants can nevertheless be examined by the Assessing Officer. It is quite obvious that is very difficult for the assessee to show the credit-worthiness of strangers. If the Revenue has any doubt with regard to their ability to make the investment, their returns may be reopened by the Department. 7. In any case, what is clinching is the additional burden on the Revenue. It must show that even if the applicant does not have the means to make the investment, the investment made by the applicant actually emanated from the coffers of the assessee so as to enable it to be treated as the undisclosed income of the assessee. This has not been done in so far as the present case is concerned and that has been noted by the Tribunal also.”

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9.

From perusal of above material facts regarding confirmation, copy of account, copy of ITR, bank statements etc. regarding 8 individuals; in light of above legal principle, it is held that the action of upholding of addition on qua 8 parties being unsustainable is set aside. Accordingly, grounds of appeal Nos. 1 to 16 are accepted.

10.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 31.08.2026

Sd/- Sd/- (M BALAGANESH) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31.08.2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

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