S 778 R PATTANAM PACCS LTD.,NAMAKKAL vs. ITO, WARD NO.2,, NAMAKKAL

PDF · subscribers
ITA 4124/CHNY/2025Status: DisposedITAT Chennai23 July 2026AY 2020-219 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the assessee's appeal, confirming the addition of ₹ 8,60,000. The assessee failed to substantiate the source and genuineness of the increased borrowings despite multiple opportunities.

What were the facts?

The assessee's borrowings from others increased by ₹ 8,60,000. The Assessing Officer (AO) added this amount to the income, stating the assessee failed to provide details of the unsecured loan lenders. The Commissioner of Income Tax (Appeals) upheld the addition, noting contradictory statements in the balance sheet and audit report, and lack of documentary evidence for the loans.

What were the issues?

Whether the addition of unexplained increase in borrowings under Section 68 is justified when the assessee fails to provide supporting evidence and makes contradictory statements.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3),Section 144,Section 142(1),Section 269SS

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: HONOURABLE GEORGE GEORGE K. & SHRI GAGAN GOYAL

Hearing: 25.06.2026Pronounced: 23.07.2026

PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (A) / NFAC (hereinafter referred as the ‘Ld.CIT(A)’), Delhi dated 07.10.2025 for the assessment year (hereinafter referred as the ‘AY’) 2020-21. GROUNDS OF APPEAL

1.

The appellant has preferred this appeal against the addition made by AO and sustained by the Appellate Authority to the extent of ₹ 8, 60,000. This amount as arrived at by the AO is the difference between the balance under the head "Borrowings from Others (Schedule 7)" forming part of "Deposits and Borrowings" in the Balance Sheet as at 31 March 2020 and 31 March 2019 as indicated below- Particulars 31.3.2020 31.3.2019 S.778 R Pattanam PACCS Ltd.

Item 2 of Balance Sheet- Deposits & Borrowings-

2.

4 Borrowings from others (Schedule 7) 44,40,000.00 35,80,000.00

The net increase during the year 2019-20 is (44, 40,000- 35, 80,000) ₹ 8, 60,000/- Schedule 7-Borrowings from other entities as on 31.3.2020 S Type of Amount Amount Balance Amount Amount Balance .No. loans borrowed repaid borrowed repaid

1.

Borrowings 1,40,000.00 1,40,000.00 1,40,000.00 from ICDP Share Capital Loan

2.

Borrowings 10,00,000.00 44,40,000,00 34,40,000.00 34,40,000.00 from ICDP Margin Money

3.

Borrowings from ICDP Total 10,00,000.00 1,40,000.00 44,40,000.00 35,80,000.00 35,80,000.00

The A.O. in his order dated 09/09/2022 u/s 143(3) r.w.s. 144 in the table provided in Page 3 has acknowledged the submission of Balance Sheet copy and Schedules thereon that show these details.

2.

Quoting the order of AO under Section 143(3) read with Section 144 in this regard, paragraph 4.2.4 (b) found in Page 5 is reproduced herein below- The unsecured loans (borrowings from others) which was meant for construction of society's building has increased by ₹ 8,60,000 from ₹ 35,80,000 to ₹ 44,40,000. The assessee has not furnished the details requisitioned in spite of notices issued u/s 142(1) dated 8-3-2022, 15-7- 2022, 26-7-2022 and 3-8-2022. Therefore, it is deemed that the assessee has no details to substantiate the source(s) and creditworthiness of the unsecured loan lenders. In the absence of any details, the genuineness of the loan creditors could not be established. Therefore, the amount of ₹ 8, 60,000 is liable for addition u/s 68 of the L.T. Act.

3.

The Appellate Authority in his order dated 7th October 2025 dealing with the addition mentioned in (1) above states as follows, vide Paragraph 6.2 to Paragraph 6.5-

6.2.

After perusal of the submission of the assessee it is found that the assessee has disclosed the above-mentioned loan being share of ICDP at schedule-7 to the balance sheet.... S.778 R Pattanam PACCS Ltd.

6.3.

However, after the perusal of the audit report in form 3CD submitted by the assessee it is found that the details of the loan explained by the assessee at clause 31(a) is disclosed as nil as under.... (Particulars of each loan or deposit in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year)...

6.4.

As such the assessee has made contradictory statement in balance sheet as compared to the audit report in Form 3CD. Further, it is found that during the course of assessment proceedings as well as appellate proceedings the assessee has baldly stated that it has received loans from the ICD P program. However, the assessee has not submitted any documentary evidence with respect to such loan was received under ICD P program... 6.5......... Therefore, considering the facts and circumstance of the case, submission of the assessee, material available on record and findings of the assessing officer, grounds of appeal to contested by the assessee as mentioned supra is dismissed and the impugned addition amounting to 8,60,000/- in the section 68 of the IT Act is confirmed.

4.

It is humbly submitted that during the course of the appellate proceedings, the appellant has uploaded online a letter (R. C. No: 130/2018-19/ICDP) dated 07/06/2019 issued by Joint

More judgments on Section 68

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

Recent GST High Court judgments

Search GST case law →