SINGHAL COTTON TEXTILES PRIVATE LIMITED,NOIDA vs. WARD 5(2)(4), NOIDA, NOIDA

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ITA 7463/DEL/2026Status: DisposedITAT Delhi19 August 2026AY 2010-113 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that opening balances could not be the subject matter of addition under Section 68 as unexplained cash credits. Therefore, the additions made by the lower authorities were deleted.

What were the facts?

The assessee challenged the lower authorities' decision to treat liabilities involving three entities as bogus. The assessee argued that the additions made by the authorities were based on opening balances rather than sums credited during the financial year.

What were the issues?

Whether opening balances can be treated as unexplained cash credits under Section 68 of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

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

Before: SHRI SATBEER SINGH GODARA

Hearing: 19.08.2026Pronounced: 19.08.2026

This assessee’s appeal for assessment year 2010-11, arises against the Commissioner of Income Tax (Appeals)/ADDL/JCIT(A)-6, Kolkata [in short, the “CIT(A)”], Delhi’s DIN and order no.

ITA No. 7463/Del/2026

ITBA/APL/S/250/2026-27/1089243450(1), dated 27.05.2026 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

Heard both the parties. Case file perused.

3.

It emerges at the outset, during the course of hearing, that the assesse/appellant canvasses its sole substantive ground challenging both the lower authorities respective assessment and lower appellate findings treating its corresponding liabilities involving three entities wherein i.e M/s. Bombay dyeing & Mfg. Co. Ltd., Delhi Reliance industries limited, Ludhiana and M/s. Tirupati Cotton Corporation involving varying sums, as bogus ones, arising for the tribunal’s adjudication.

4.

That being the case, learned counsel refers to the assesse’s paper book at pages 4, 30 and 72, making it explicitly clear that both the lower authorities added the opening balances than the corresponding sums credited during the relevant financial year. This factual position has gone unrebutted from the Revenue side. I therefore hold that both the learned lower authorities impugned action goes against CIT vs. Usha Stud Agricultural Farms Ltd. reported in (2008) 301 ITR 2

ITA No. 7463/Del/2026

384 (Delhi) that such opening balances could not form subject matter

of Section 68 unexplained cash credit addition. Deleted accordingly.

5.

This assessee’s appeal is allowed.

Order pronounced in the open court on 19th August, 2026

Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 27/08/2026. Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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