ASSISTANT COMMISSIONER OF INCOME TAX, DELHI vs. M/S VANTAGE INTEGRATED SECURITY SOLUTIONS PRIVATE LIMITED, DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘C’ : NEW DELHI)

BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 3163/Del/2025 (Asstt. Year : 2017-18) And ITA No. 3164/Del/2025 (Asstt. Year 2018-19) ACIT, vs. M/s Vantage Integrated Security Room No. 192A, First Floor, Solutions Private Limited, CR Building, ITO, 1696/2, Mohan Building, New Delhi Bhagirath Palace, Delhi-6 [PAN: AAACU1717F) (Appellant) (Respondent) Appellant by : Sh. G.P. Singh, Sr. DR. Respondent by : Sh. Vishal Kalra, Adv.

Date of Hearing 30.06.2026 Date of Pronouncement 03.07.2026

ORDER PER SUNIL KUMAR SINGH, JM : 1. These appeals have been filed by the Revenue against the respective impugned orders dated 21.3.2015 & 20.3.2025 passed in Appeal No. CIT(A), Delhi-9/10715/2019-20 and Appeal No. NFAC/2017-18/10085094 by the Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘CIT(A)’] u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “Act”) for the Assessment Years (AYs) 2017-18 & 2018-19 respectively. In both these appeals common question of issues and facts are involved, hence, for the sake of convenience and brevity, both these appeals are being decided by this common order. The facts of ITA No. 3163/Del/2025 (AY 2017-18) are only being narrated as under:-

ITA NO. 3163/Del/2025 (AY 2017-18) 2. The brief facts of the case are that the assessee is Private Limited Company and is in the business of providing security solutions. Assessee filed its return of income for the assessment year 2017-18 on 31.10.2017 declaring total income of Rs. 14,93,21,220/-. The case was selected for scrutiny. Statutory notices u/s. 143(2) read with section 142(1) was issued and served upon the assseee, seeking details in respect of the unsecured loans of Rs. 25 lacs, Rs. 72.50 lacs and Rs. 10 lacs from the Directors Mrs. Manju Verma, Pramod Kumar Verma and Pratik Verma respectively. Assessee responded only in part electronically. According to the assessment order, the books of accounts were not produced during the assessment proceedings. The AO, thus completed the best judgement u/s. 144 of the Act and added Rs. 1,07,50,000/- as unsecured loan u/s. 68 read with Section 115BBE of the Act, Rs. 84,49,000/- as bad debts and Rs. 6,60,02,416/- estimated as net profit and assessed the total income of assessee at Rs. 23,45,22,636/-. 3. Assessee preferred appeal before the Ld. CIT(A), who sought the remand report from the AO and after considering the remand report dated 24.9.2024, assessee’s submissions and additional evidences, deleted aforesaid additions. 4. Aggrieved, revenue has filed this appeal on the following grounds:- “1. Whether, on the facts and circumstances of the case and in law the Ld. CIT(A) has erred in deleting the addition made on account of unsecured loans amounting to Rs. 1,07,50,000/- taken from the directors without considering the fact that assessee could not prove the creditworthiness of transactions during the course of assessment proceedings.

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6,60,02,416/- as assessee has failed to produce the books of account before the Assessing Officer. 4. The appellant craves leave to add, alter, amend, append or delete any of the above grounds of appeal.”

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Tax Rules, 1962 enroute the remand report dated 24.9.2024 submitted by the Assessing Officer. The relevant part of the impugned order reads as under:- “7.2 Ground No. 3 pertains to the additions of Rs. 1,07,50,000/- on account of unsecured loans received from the directors of the company during the assessment Year 2017-18. The impugned order states that there was no compliance on the part of the directors in response to the summons u/s 131 issued on 26.12.2019. The order holds that the source of the loan given by Shri Pratik Verma remained unexplained. It was held that the creditworthiness of the lenders was questionable therefore an addition on this account was made. It is seen that the appellant has filed the copies of ITRs of the directors and has questioned the quantum of addition, stating that a net loan of Rs. 52 lakhs was taking during the year. It is evident from the details filed that the lenders had the capacity to lend the sums involved and that they continued to be directors in the company. Therefore, the creditworthiness, identity and genuineness of the transactions has been proved though the AO has questioned only the creditworthiness aspect in the transaction. In view of the foregoing, the addition is deleted and the ground is allowed. 7.3 Ground No. 4 relates to relates to addition of Rs. 84,49,000/- on account of bad debts / balances written off. It is seen that the assessee had written off bad debts /miscellaneous balance amounting to Rs. 84,49,000/- appearing in the books of accounts for the relevant year. It is seen from the submission made that these balances pertain to earlier years as they are opening balances in the beginning of the year. The appellant had submitted that these were amounts collectable from debtors on account of credit sale and since these amounts could not be collected they had been written off. It is also been submitted that the conditions to claims these bad debts have been fulfilled and form part of the Balance Sheet and P&L account which have been duly audited. The appellant has relied upon the judgment of the Hon’ble Supreme Court in TRF Ltd. Vs. CIT(2010)323ITR397 to support its stand. I find merit in the submission of the appellant and the addition on this account is deleted and the ground is upheld. 7.4 Ground No. 5 relates to an addition of Rs. 6,60,02,416/- to the income of the appellant by estimating the net profit to be 20% instead of 13.74%. It is seen that the appellant had disclosed a net profit of 13.74% on a total turnover of Rs. 105.39 crores. The impugned order states that notices u/s

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133(6) were issued to four Trade Creditors on 26.12.2019, seeking their confirmations however till the passing of the order there was no response from these creditors. Further, the appellant was asked to file certain details vide a notice u/s 142(1) and as no response was received from the creditors or the appellant, the AO held that he was satisfied that no books of account were maintained and estimated the net profit at 20% instead of 13.74% declared by the appellant. From details submitted by the appellant, it is seen that the net profit at 13.74% is higher than the previous years and is substantially higher than the succeeding year. It is quite clear that profit cannot be estimated without the rejection of the books of accounts and that to only after invoking the provisions of section 145 of the Act. This has obviously not been done by the AO and further the estimation is not based on any material evidence to support the same in terms of comparison and is far from the keeping with the results shown by the appellant in the’ past and in the future. In view of the foregoing, the addition is deleted and the ground is dismissed….” 10. The first part of the addition relates to addition Rs. 1,07,50,000/- on account

of unsecured loan received from the Directors of the company. The lenders,

being Directors of the company had the capacity to lend the sums involved, who

were continued to be the Directors of the Company. In such circumstances, Ld.

CIT(A) has rightly observed that the creditworthiness, identity and genuineness of

the transaction was proved and rightly deleted the addition.

bad debts which were appearing in the books of accounts for the relevant year.

The balances were pertaining to earlier years as there are opening balances in the

beginning of the year. Ld. CIT(A), after examination of entire material and

evidence, has rightly observed that these amounts were collectable from debtors on

account of credit sale and since these amounts could not be collected, they were

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written off. Ld. CIT(A) has also taken strength for deleting this addition from the decision of the Hon’ble Supreme Court of India in the case of TRF Ltd. vs. CIT

(Supra). The facts of the instant case easily distinguishable from the facts of Khayati Realtors Pvt. Ltd. (Supra). 12. The addition of Rs. 6,60,02,416/- was made by the AO by estimating the net

profit @ 20% as against @13.74% disclosed by the assessee on a total turnover of Rs. 105.39 crores. A comparative table showing net profit of the appellant company from AY 2014-15 to AY 2020-21 is part of impugned order and depicted in para

6.2 of the impugned order. According to this comparative figures of NP

percentage, it is discernible that the net profit disclosed by the assessee for AY 2017-18 is @13.74% which is much higher than the NP @8.48% disclosed for the

preceding year AY 2016-17 and NP @4.82% during the succeeding AY 2018-19.

In such circumstances, the estimation taken by AO @20% cannot be said to be rational. Thus, we do not find any error of fact or law in this respect also in

impugned order. The aforesaid point is accordingly determined in negative against

the appellant-revenue and in favour of the Respondent-assessee. This appeal is liable to be dismissed.

ITA No. 3164/Del/2025 (AY 2018-19) 13. The facts of this appeal are identical to the facts of ITA No. 3163/Del/2025 (AY 2017-18) except the difference of amounts and figures. Hence, our findings given in ITA NO. 3163/Del/2025 (AY 2017-18) will mutatis mutandis apply to this appeal also. Accordingly, this appeal of the Revenue is also liable to be dismissed.

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Order pronounced in the Open Court on 03.07.2026.

Sd/- Sd/- (S. RIFAUR RAHMAN) (SUNIL KUMAR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER

Date: 03.07.2026 SRBhatnaggar Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order,

Assistant Registrar, ITAT, Delhi Bench

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