ISHA MEHTA,DELHI vs. ITO, WARD 35(1), DELHI

PDF · subscribers
ITA 592/DEL/2026Status: DisposedITAT Delhi19 August 2026AY 2021-225 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the addition made by the AO under Section 68 read with Section 115BBE was justified. The assessee failed to prove the genuineness of the unsecured loans from the disputed parties.

What were the facts?

The assessee received unsecured loans from two parties, Rishi Mehta and Stellar Leisure World LLP, totaling Rs 1,91,60,000. The Assessing Officer (AO) disputed these loans because the lenders had not filed their income tax returns.

What were the issues?

Whether the addition of unsecured loans under Section 68 is justified when the lenders have not filed their income tax returns. Whether the provisions of Section 115BBE are applicable to the disputed loan amounts.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A”: NEW DELHI

Before: SHRI M. BALAGANESH & MS. KAVITHA RAJAGOPAL

For Appellant: Adv. & Ms
Hearing: 02.06.2026Pronounced: 19.08.2026

PER M. BALAGANESH, A. M.:

This appeal of the assessee arises out of the order passed by the Commissioner of Income Tax (Appeals) NFAC, Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 592/Del/2026 for A.Y. 2021-22 dated 01.12.2025 which in turn arises out of the order passed by the Assessing Officer, Assessment Unit, Income Tax Department (hereinafter referred to as ‘ld. AO’) passed u/s 143(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.12.2022.

2.

Though the assessee has raised several grounds of appeal before us, the only effective issue to be decided in this appeal is as to whether the Learned CITA was justified in confirming the addition of Rs 1,91,60,000 made by the Learned AO under section 68 read with section 115BBE of Page | 1

ITA No. 592/Del/2026 Isha Mehta the Act on account of receipt of unsecured loans, in the facts and circumstances of the instant case. 3. We have heard the rival submissions and perused the materials available on record. The assessee filed her return of income for the Assessment Year 2021-22 on 23-3-2022 declaring taxable income of Rs 17,20,870. The case of the assessee was selected for scrutiny for the reason that lenders from whom unsecured loans were received by the assessee, had not filed their income tax returns. The Learned AO tabulated the list of five persons from whom unsecured loans were received by the assessee in page 3 of the assessment order . Out of this, the Learned AO accepted the loans received from three parties as genuine. The two parties from whom unsecured loans were received by the assessee which were disputed by the Learned AO are as under:- Rishi Mehta (PAN AAPPM9148L) - Rs 21,60,000 Stellar Leisure World LLP (PAN ACXFS3679Q) - Rs 1,70,00,000

4.

The Learned AO noted that the returns of income for the aforesaid lenders for the Assessment Years 2019-20, 2020-21 and 2021-22. The Learned AO also recorded the status of compliance of annual returns and Balance Sheets filed with Registrar of Companies in respect of Stellar Leisure World LLP and observed that the said concern had not filed its annual returns and financial statements before the Registrar of Companies (ROC). By this process, the Learned AO doubted the genuineness of transactions and creditworthiness of the lender. 5. With regard to Rishi Mehta, the Learned AO noted that there is an opening balance of Rs. 2,00,000 and assessee did not repay that amount during financial year 2020-21 and yet further loan of Rs. 21,60,000 was advanced by Rishi Mehta to the assessee even though his returned income Page | 2

ITA No. 592/Del/2026 Isha Mehta was Rs. 17,12,380. Accordingly, the Learned AO doubted the creditworthiness of the lender and the genuineness of the transactions. 6. By the aforesaid observations, an addition of Rs. 1,91,60,000 was made in the assessment by the Learned AO under section 68 read with section 115BBE of the Act. This action of the Learned AO was upheld by the Learned CIT

7.

At the outset, we find that assessee had furnished the income tax returns of Stellar Leisure World LLP for the last 3 years. The said lender had earned income of Rs. 83,58,400 in assessment year 2021-22 which was set off against brought forward loss of previous year, thereby resulting in the taxable income at Rs. Nil. The credit worthiness of the lender is also proved beyond doubt. Further, the assessee had advanced Rs. 50 lakhs to the said party and received back the same. Next advance of Rs. 40 lakhs was paid to that party and the same was received back. Again, the assessee had paid Rs.10 lakhs as advance to that party and received back. After all the squaring up of these transactions, the assessee received Rs. 70 lakhs from the same party. This sum of Rs. 70 lakhs was outstanding as at the end of the previous year relevant to assessment year 2021-22. Out of the total sum received during the year in the sum of Rs. 1,70,00,000, Rs. 1 crore has already been repaid by the assessee during the year itself and only a sum of Rs. 70 lakhs was outstanding. The lender is duly assessed to income tax which proves the identity of the lender. All the transactions are routed through regular banking channels and assessee has been having transactions with the same party during the year in the form of a current account. The assessee had received as well as repaid the monies from/to the said lender during the year. The said lender had also disclosed the amounts advanced to the assessee in its balance sheet. All these transactions prove the genuineness of the Page | 3

ITA No. 592/Del/2026 Isha Mehta transactions. Merely because the said lender had not filed its annual returns with the registrar of companies, the transactions had with the said party could not be treated as ingenuine. In our considered opinion, all the three ingredients of section 68 of the Act had been duly complied with. The assessee had even stated all these facts in response to the show cause notice filed before the Learned AO. The confirmation of loan from the lender was also duly provided to the Learned AO together with the audited balance sheet. 8. With regard to Rishi Mehta, the assessee filed a detailed reply in response to the show cause notice before the Learned AO stating that the said lender is duly assessed to income tax and the identity of the lender is proved by the copy of the ITR filed before the Learned AO. The said party is having sufficient declared income in the income tax returns which itself goes to prove that he had sufficient credit worthiness to advance the loans to the assessee. The assessee also furnished the confirmation from the said lender before the Learned AO together with the copy of the audited balance sheet of the lender. The transactions were routed through regular banking channels and the loan advanced by the said lender to the assessee had been duly reflected in the audited balance sheet thereby proving the genuineness of the transactions. Further, Rishi Mehta is the husband of the assessee.

9.

It is pertinent to note that after the furnishing of all the requisite documents by the assessee before the Learned AO, the onus gets shifted to the revenue. The Learned AO in the instant case had not resorted to make any verification to examine the veracity of the documents furnished by the assessee. When the onus cast on the Learned AO has not been discharged, there is no reason for the lower authorities to doubt the

ITA No. 592/Del/2026 Isha Mehta veracity of the loan received by the assessee. In our considered opinion, the three ingredients of Section 68 of the Act had been duly explained and complied by the assessee in the instant case before the lower authorities. Hence, no part of such credit could be treated as unexplained warranting any addition under Section 68 of the Act. Accordingly, the grounds raised by the assessee are allowed.

10.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 19/08/2026

Sd/- Sd/- (KAVITHA RAJAGOPAL) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 19/08/2026 *G.P. Sr. PS* Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →