DCIT, CIRCLE-1(1), GURGAON, GURGAON vs. KANOI METREC LLP, GURGAON

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ITA 7762/DEL/2025Status: DisposedITAT Delhi14 May 2026AY 2017-183 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that amounts received by a firm from its partners do not attract section 68 addition, as such amounts should be taxed in the hands of the partners. The assessee had also provided sufficient documentation to explain the identity, genuineness, and creditworthiness of the loans.

What were the facts?

The Revenue appealed against the deletion of an addition of Rs. 5,46,59,000/- made under section 68 of the Income Tax Act. This amount represented unsecured loans received by the assessee firm from its partners.

What were the issues?

Whether unsecured loans received by a firm from its partners constitute unexplained cash credits under Section 68 of the Income Tax Act.

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: ‘E’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA

For Appellant: Shri Parikshit Aggarwal, CA, Shri Sunny Jain, CA
For Respondent: Ms. Ankush Kalra, Sr. DR
Hearing: 12.05.2026Pronounced: 12.05.2026

PER SATBEER SINGH GODARA, JM

This Revenue’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1081773535(1), dated

ITA No.7762/Del/2025 15.10.2025 involving proceedings under section 143(2) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.

2.

It emerges during the course of hearing at the outset that the Revenue’s sole endeavor herein is to revive the Assessing Officer’s action making section 68 addition of unexplained cash credits amounting to Rs. 5,46,59,000/- in the assessee’s hands which stands deleted in the CIT(A) lower appellate discussion.

3.

That being the case, a perusal of the records indicates that the impugned sum amounting to Rs. 5,46,59,000/- represents the assessee’s unsecured loans received from its partners Mr. Saket Kanoi and Mrs. Mandira Kanoi amounting to Rs. 3,46,59,000/- and Rs. 2,00,00,000/-; respectively. We are of the considered view in this factual backdrops in light of CIT vs Metal & Metals of India (2007) 208 CTR (P&H) and CIT vs CIT vs. Metachem Industries [2000] 245 ITR 160 (MP) that such amounts received by a firm from its partners does not attract section 68 addition as the same ought to be taxed in the concerned partners’ hands only. This is further coupled with the fact that the assessee has all along filed its detailed paperbook running into 83 pages having compiled the

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ITA No.7762/Del/2025 said twin partners income tax returns computation, balance sheets, bank statements as well as ledgers explaining identity, genuineness and creditworthiness of the unsecured loans herein. We thus find no reason in the Revenue’s solitary ground seeking to revive the section 68 unexplained cash credits addition which fails in very terms.

4.

This Revenue’s appeal is dismissed.

Order pronounced in the open court on 12.05.2026 .

Sd/- Sd/- (NAVEEN CHANDRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 14.05.2026 Pooja Mittal/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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