MR. ANAND LILARAM RAISINGHANI ,MUMBAI vs. ASST. CIT CIRCLE 16(1), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 6965/MUM/2025 Assessment Year: 2014-15 Anand Lilaram Raisinghani ACIT, Circle- 16(1) Flat No. 2701/2801, The Atlantis Off Link Road, Sab Tv Vs. Lane Andheri (West), Mumbai, Maharashtra, 400053 (PAN: AACPR4002P) (Appellant) (Respondent) Present for: Assessee : Shri. Nitesh Joshi, Advocate and Shri. Deepak S. Sukhija, CA Revenue : Shri Surendra Mohan, Sr. DR Date of Hearing : 28.04.2026 Date of Pronouncement : 27.07.2026 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of CIT(A)/National Faceless Appeal Centre (NFAC), Delhi, vide order no. ITBA/NFAC/S/250/2025-56/1080335323(1), dated 04.09.2025, passed against the assessment order by ACIT, Circle 16(1), Mumbai u/s. 143(3) r.w.s. 254 and 263 of the Income-tax Act (hereinafter referred to as the “Act”), dated 30.09.2021, for Assessment Year 2014- 15.

2 ITA No. 6965/Mum/2025 Anand Lilaram Raisinghani AY 2014-15 "The Commissioner of Income-Tax [Appeals] erred in confirming the addition of Rs. 1,59,25,000/- being the unsecured loan from M/s. Diyas Production Pvt. Ltd u/s. 68 of the I. T. Act, 1961".

Sr. No. Name of party Amount of loan (Rs.) 1 Anju Gems 25,00,000 2 Dharm Oberoi 9,00,000 3 Diyas Production 1,59,25,000 4 Reiva Sarees 7,50,000

3.1. Aggrieved by the revisionary order, assessee preferred an appeal before the Coordinate Bench of ITAT, Mumbai. The Bench, vide order dated 02.01.2020 directed the ld. Assessing Officer to restrict the verification to two entities only, i.e., Dharam Oberoi and Diyas Production Pvt. Ltd. and restored the matter back to the file of ld. Assessing officer. Subsequently, ld. Assessing officer passed an order and added the amount of Rs. 1,68,25,000/- to the total income of the assessee u/s 68 towards unsecured loans received from Diyas Production of Rs. 1,59,25,000/- and from Dharm Oberoi of Rs. 9,00,000/-.

3 ITA No. 6965/Mum/2025 Anand Lilaram Raisinghani AY 2014-15

3.2. In the first appeal, ld. CIT(A) gave relief to the assessee in respect of unsecured loan of Rs. 9,00,000/- from Dharm Oberoi for which Department is not in appeal before the Tribunal.

4.1. In this regard, ld. Assessing Officer had issued notice u/s. 133(6) to the lender party, who did not respond initially but later, replied through its submission dated 20.09.2021 and furnished the aforementioned documents before the ld. Assessing Officer. From the perusal of the return of lender party for AY 2013-14, ld. Assessing Officer noted that it is filed as ‘Nil’ income return which made him conclude that there is no creditworthiness of the lender for the impugned transaction undertaken by it with the assessee. Ld. CIT(A) endorsed the adverse conclusion drawn by the ld. Assessing Officer by observing that the company declaring ‘Nil’ income and having no demonstrative financial strength cannot be said to possess the capacity to advance loan. He resorted to the doctrine of preponderance of human probability for which he observed that mere filing of ITR and confirmations does not prove the creditworthiness. He also noted that

4 ITA No. 6965/Mum/2025 Anand Lilaram Raisinghani AY 2014-15 non-filing of relevant bank statement of the lender party led to failure on the part of the assessee to discharge its onus casted u/s. 68.

Opening Amount given Mode of Amount Mode of Closing Remarks, if Balance during the Payment repaid repayment Balance any year during the year Nil 1,60,00,000 RTGS/NEFT 75,75,000 RTGS/NEFT 84,25,000 AY 2014-15 84,25,000 Nil Ν.Α. 38,10,000 RTGS/NEFT 46,15,000 AY 2015-16 46,15,000 Nil Ν.Α. 46,15,000 RTGS/NEFT Nil AY 2016- 17. Rs.5,00,000 was interest charged and collected from Mr. Anand Raisinghani

5 ITA No. 6965/Mum/2025 Anand Lilaram Raisinghani AY 2014-15 5.1. List of documents furnished by the lender party before the ld. Assessing Officer are noted as under: a. Account confirmation for the period - i) 01.04.2013 to 31.03.2014 ii) 01.04.2014 to 31.03.2015 iii) 01.04.2015 to 31.03.2016 b. Ledger account from 01.04.2014 to 31.03.2015 c. Relevant extract from the bank statement for the period from 01.04.2014 to 31.10.2015 d. Audited financial statements for year ended on 31.03.2014 e. Acknowledgement of return of income for AY 14-15 f. Ledger account from 01.04.2013 to 31.03.2014 g. Relevant extract from the bank statement with Citi Bank from 01.04.2013 to 31.03.2014

5.2. Also, assessee had furnished the details of the impugned transaction along with corroborative documentary evidence before the ld. Assessing Officer in the course of proceedings u/s. 143(3) r.w.s. 263. The submissions so made included the following: a. Reference in the letter b. Account Confirmation from 01.04.2013 to 31.03.2014 c. Acknowledgement of return of income for AY 14-15 d. Ledger account from 01.04.2014 to 31.03.2015 e. Relevant extract from assessee's bank statement of HDFC Bank, Punjab and Maharashtra Co-operative Bank Ltd. and Kotak Mahindra Bank from 01.04.2014 to 31.03.2015 f. Ledger account from 01.04.2015 to 31.03.2016 g. Relevant extract of HDFC Bank and Kotak Mahindra Bank from 01.04.2015 to 31.03.2016

6 ITA No. 6965/Mum/2025 Anand Lilaram Raisinghani AY 2014-15 5.3. It was further explained that assessee had received in total an amount of Rs.1.60 crores as loan from the said lender party, out of which an amount of Rs.75.75 lakhs was repaid during the year and the balance remained outstanding of Rs.84.25 lakhs. However, ld. PCIT in the revisionary proceedings considered the repayment of amount of Rs. 75,000/- only thereby, taking the net amount received at Rs.1,59,25,000/-. To this effect loan confirmation statement were placed on record corroborated by relevant portion of the bank statement to demonstrate the correct factual position. Further, the remaining amount of Rs.84.25 lakhs was repaid by the assessee through RTGS on various dates through its bank account with HDFC bank and Kotak Mahindra Bank, in the subsequent two Assessment Years i.e., 2015-16 and 2016-17. In this regard also, copies of loan confirmation were placed on record along with the relevant portion of the bank statement.

6.1. We draw our force from the decision of the Hon’ble jurisdictional High Court of Bombay in the case of PCIT v. Paradise Inland Shipping Pvt. Ltd. [2017] 84 taxmann.com 58 (Bom) wherein it was held that once the assessee has produced documentary evidence to establish the existence of the lenders, the burden would shift on the revenue to establish its case. We also draw our force from the decision of Hon’ble jurisdictional High Court of Bombay in the case of CIT vs. Orchid Industries Pvt. Ltd. 397 ITR 136 (Bom) wherein it was held that mere

7 ITA No. 6965/Mum/2025 Anand Lilaram Raisinghani AY 2014-15 non-compliance of summon under section 131 would not disprove the transaction and other documents filed on record cannot be brushed aside by the Ld. Assessing Officer. The relevant extract from the said decision is reproduced as under: "The Assessing Officer added Rs.95 lakhs as income under Section 68 of the Income Tax Act only on the ground that the parties to whom the share certificates were issued and who had paid the share money had not appeared before the Assessing Officer and the summons could not be served on the addresses given as they were not traced and in respect of some of the parties who had appeared, it was observed that just before issuance of cheques, the amount was deposited in their account. The Tribunal has considered that the Assessee has produced on record the documents to establish the genuineness of the party such as PAN of all the creditors along with the confirmation, their bank statements showing payment of share application money It was also observed by the Tribunal that the Assessee has also produced the entire record regarding issuance of shares ie allotment of shares to these parties, their share application forms, allotment letters and share certificates, so also the books of account. The balance sheet and profit and loss account of these persons discloses that these persons had sufficient funds in their accounts for investing in the shares of the Assessee. In view of these voluminous documentary evidence, only because those persons had not appeared before the Assessing Officer would not negate the case of the Assessee. The judgment in case of Gagandeep Infrastructure (P.) Ltd. (supra) would be applicable in the facts and circumstances of the present case.”

6.2. Ld. Assessing Officer has not bothered to discuss or point out any defect or deficiency in the documents of the lenders, brought on record. These evidences furnished have been neither been controverted by the ld. Assessing Officer during the assessment proceedings nor anything substantive brought on record to justify the addition made by him. Thus, going by the records placed by the assessee of the lender, it can be safely held that the assessee has discharged its initial burden and the burden shifted on the ld. Assessing Officer to enquire further into the matter which he failed to do so. It is relevant to quote the decision of Hon’ble jurisdictional High Court of Bombay in the case of CIT v. Creative World Telefilms P. Ltd. (2011) 333 ITR 100 (Bom) wherein it was held as under:

8 ITA No. 6965/Mum/2025 Anand Lilaram Raisinghani AY 2014-15 “In the case in hand, it was not disputed that the assessee had given the details of name and address of the shareholder, their PAN/GIR number and had also given the cheque number, name of the bank. It was expected on the part of the Assessing Officer to make proper investigation and reach the shareholders. The Assessing Officer did nothing except issuing summons which were ultimately returned back with an endorsement "not traceable". The Assessing Officer ought to have found out their details through PAN cards, bank account details or from their bankers so as to reach the shareholders since all the relevant material details and particulars were given by the assessee to the Assessing Officer. In the above circumstances, the view taken by the Tribunal could not be faulted. No substantial question of law was involved in the appeal.''

6.3. Similar view was taken by the Hon’ble High Court of Madras in the case of Pranav foundations Ltd. (2015) 229 Taxman 58 (Mad) wherein it was held as under: “In view of the fact that all the four parties, who are subscribers of the shares, are limited companies and enquiries were made and received from the four companies and all the companies accepted their investment. Thus, the assessee has categorically established the nature and source of the said sum and discharged the onus that lies on it in terms of section 68. When the nature and source of the amount so invested is known, it cannot be said to undisclosed income. Therefore, the addition of such subscriptions as unexplained credit under section 68 is unwarranted.”

6.4. Further, reliance is placed on the decision of Hon’ble Supreme Court in the case of CIT v. Orissa Corporation (P) Ltd. (1986) 159 ITR 78 (SC) wherein it was held as under: “In this case the assessee had given the names and addresses of the alleged creditors. It was in the knowledge of the revenue that the said creditors were the income-tax assessees. Their index number was in the file of the revenue. The revenue, apart from issuing notices under section 131 at the instance of the assessee, did not pursue the matter further. The revenue did not examine the source of income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the alleged loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the assessee could not do any further. In the premises, if the Tribunal came to the conclusion that the assessee had discharged the burden that lay on him, then it could not be said that such a conclusion was unreasonable or perverse or based on no evidence. If the conclusion was based on some evidence on which a conclusion could be arrived at, no question of law as such could arise. The High Court was, therefore, right in refusing to refer the questions sought for. Decision of the High Court affirmed.”

9 ITA No. 6965/Mum/2025 Anand Lilaram Raisinghani AY 2014-15 6.5. Reliance is also placed on the decision of Hon'ble High Court of Calcutta in the case of PCIT vs. Delta Dealers (P) Ltd. [2025] 173 taxmann.com 911 (Cal) wherein it was held that, where ld. Assessing Officer made addition u/s. 68 to income of assessee company on account of share capital and share premium, since all share subscribing companies had responded to notices issued u/s. 133(6) and made their submissions and produced documents and Assessing Officer failed to deal with those documents, to point out any discrepancies, Tribunal was justified in deleting the addition.

Order is pronounced in the open court on 27 July, 2026 Sd/- Sd/- (Pawan Singh) (Girish Agrawal) Judicial Member Accountant Member Dated: 27 July, 2026 MP, Sr.P.S. Copy to: 1 The Appellant 2 The Respondent 3 DR, ITAT, Mumbai 4 Guard File 5 CIT BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai