M/S. VIJETHA GOLD LLP,CHENNAI vs. DCIT, NCC-4(1), CHENNAI

आयकर अपीलीय अिधकरण, ’सी’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI �ी एस.एस. िव�ने� रिव, �ाियक सद� एवं �ी एस.आर. रगुनाथॎ◌, लेखा सद� के सम% Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri S.R. Raghunatha, Accountant Member आयकर अपील सं./I.T.A. No. 136/Chny/2026 िनधा&रण वष&/Assessment Year: 2022-23 M/s. Vijetha Gold LLP, Vs. Deputy Commissioner of Income Tax, 8/14, Ayya Mudali Street, Non-Corporate Circle -4(1), Sowcarpet, Chennai – 600 079. Chennai – 600 006. [PAN: AARFV-7911-L] (अपीलाथ(/Appellant) ()*थ(/Respondent) अपीलाथ( की ओर से / Appellant by : Mr. D. Anand, Advocate )*थ( की ओर से/Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/ Date of hearing : 29.04.2026 घोषणा की तारीख /Date of Pronouncement : 29.06.2026 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 19.12.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi (herein after “ld.CIT(A)”) for the assessment year 2022-23.

2 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 3. Ground nos. 2 to 7 raised by the assessee challenging the action of the

ld.CIT(A) in confirming the order of the AO in making addition u/s. 68 of the

Act in the facts and circumstances of the case.

business under the name and style as “Vijetha Gold LLP”. The assessee

filed its return of income declaring a total income of Rs.15,24,020/- and

under scrutiny the AO issued notices u/s. 143(2) & 142(1) of the Act and

show cause notice, for which assessee filed reply which are reproduced in

page no.3 of the paper book. The AO held the reply of the assessee along

with copies of return of income, confirmation ledger account for the

unsecured loan interest and sundry creditors found not to have credit

worthiness and added an amount of Rs.2,56,68,482/- u/s. 68 of the Act vide

its order dated 20.03.2024 passed u/s. 143(3) r.w.s. 144B of the Act.

Having not satisfied with the order of the AO, the assessee filed an appeal

before the ld.CIT(A), wherein he confirmed the order of the AO by recording

his reasons recorded vide page no. 14 to 17 of the impugned order. As

aggrieved by the order of the ld.CIT(A), the assessee is before us.

Section 68 cannot be invoked in case of the assessee since the creditors

3 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 are mostly outstanding creditors and appear as opening balances. He

submits, further, that the creditors are brought forward balances and are

genuine in nature and has furnished ledger accounts to prove the quantum

of opening balance appearing in the various creditors account and even if

the same were to be added on account of their non-genuineness, then also

those amounts could not be added to the income of the assessee for the

year under consideration, as the question of genuineness thereof could be

examined only in the year in which they were credited to the account. He

argued that addition u/s. 68 of the Act can be made only if the credit entry

appear in the books of account of an assessee for the relevant previous

year and only such credits can be treated as unexplained cash credit in the

absence of proper explanation by the assessee. In the instant case the

creditors appear as opening balances and the same cannot be added u/s.

68 of the Act. He argued Vehemently that in making addition under section

68 of the income tax act even though the assessee has identified the

creditors, the genuineness of transaction cannot be disputed since the

transaction are through proper banking channels and creditworthiness are

established since the creditors are holing PAN and assessed to tax. The

ld.AR placed on record order of this Tribunal in the case of M/s. Anbu

Educational Trust in ITA No. 186/Chny/2019 for AY 2013-14 for the

proposition that the Revenue has no jurisdiction to seek information about

4 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 the source of source for loans in the year under consideration. Further, for

the proposition of opening balances, the opening balance cannot be made

has an addition u/s. 68 of the Act and referred to Hon’ble High Court of

Delhi decision dated 28.05.2025 in the case of Sheela Overseas Pvt Ltd in

ITA No. 546/2023.

assessment order and submits that credit worthiness of parties 4,5 &6 were

not provided during the course of assessment proceedings. The Ao rightly

held the credit worthiness of said parties are doubtful. She argued

vehemently the unsecured loans as availed by the assessee are to be

taxed in his hands since no credit worthiness proved with reference to said

parties. She submits the balance sheets of earlier year also not provided

before both the authorities. Since, the assessee filed the same before this

Tribunal, which requires examination and may be remanded to ld.CIT(A).

She referred to impugned order and submits that the assessee failed to

adduce any such supporting proofs/evidences to establish the

genuineness and credit worthiness of unsecured loans etc as claimed as

involving explainable with opening balances etc as needed to advance the

grounds of appeal contrary to the findings of the AO and the assessment

5 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 order. She supported the order of the ld.CIT(A) and pleaded to dismiss the

grounds raised by the assessee.

note that the ld.AR primarily contended that all details of parties involved in

giving unsecured loans to assessee were furnished before the AO and the

findings of the AO in observing the amount involved with the said sundry

creditors remained as unexplained cash credit u/s. 68 of the Act is not

correct. On perusal of the assessment order, we find the case of the

assessee was selected for complete scrutiny under CASS to verify the

genuineness of liabilities of business parties as is evident from para no.

4.2.1 of the assessment order. Further, we note the assessee furnished

replies to the notices on 16.06.2023, 29.11.2023, 22.02.2024 and

29.02.2024, wherein the details of said replies were reproduced in page

no.3 of the assessment order. On perusal of the same, as it relates to the

issues on hand, we find details with reference to unsecured loans were

provided in sl.no. 3 & 4. Further, on reading of para no.4.5 of the

assessment order, we note that the assessee attended the video

conference on 18.03.2024 and explained that all the unsecured loans and

credit transactions are genuine transactions and all the creditors are having

credit worthiness, supporting it the assessee furnished copies of return of

6 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 income, ledger account and bank account statement for the unsecured

loans creditors substantiating the genuineness and credit worthiness of the

creditors which are at page 1 to 101 of paper book-II. On reading of the

para 4.6 of the assessment order, the AO held there was no

creditworthiness of the said creditors which clearly establishes that, the AO

was not satisfied with the explanation offered by the assessee. Therefore,

the findings of the AO and ld.CIT(A) in observing that there was no

evidence substantiating the creditworthiness, in our opinion, is incorrect.

of M/s. Anbu Educational Trust in ITA No. 186/Chny/2019 for AY 2013-14

and submits that the AO has no jurisdiction to examine source of source

for the year under consideration as the amendment by insertion of first

proviso to section 68 of the Act came into effect from 01.04.2023 relevant

to AY 2023-24 and subsequent years. He argued that the Tribunal clearly

held prior to the above amendment source of source could not be

questioned and once the lender was indentifiable and amounts were

disbursed through banking channels, loans u/s. 68 of the Act were liable to

be accepted in the hands of recipients. The relevant para no.7 of the said

order is reproduced herein below for better understanding:

“7.0 We have carefully considered the voluminous paper book and Written Submissions filed by the rival parties on record. The arguments put forth by

7 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 the Ld.AO in his remand report have been examined at length. We have noted that the Ld.CIT(A) has placed full reliance only upon the remand report. We have also noted that in the remand report the Ld.AO has primarily contested grant of any relief to the assessee on the premise that the source of source is doubtful. The Ld.AO has casted doubts upon the impugned loans holding that the lenders of the assessee have unexplained credits in their bank accounts etc and / or they did not had sufficient income sources to justify their creditworthiness. In this regard, we find sufficient force in the argument of the appellant assessee that Revenue authorities have got powers to examine source of source only upon insertion of first provisio u/s 68 by the Finance Act 2022 w.e.f. 01.04.2023. Thus, prior to the above amend source of source could not be questioned. Once a lender was identifiable and amounts were disbursed through banking channels, loans u/s 68 were liable to be accepted in the hands of recipients. Revenue did possess authority to initiate corrective action in the hands of lenders qua their assessments for the impugned sources. Accordingly, we are of the considered view that no case of any addition is made out in the hands of the assessee u/s 68 for the year under consideration. The order of Ld.CIT(A) is therefore set aside and the Ld.AO is directed to delete the impugned addition of Rs.1,27,40,000/- confirmed by the Ld.CIT(A). Grounds of appeal nos. 2 to 10 raised by the assessee are therefore allowed.”

doubts upon the impugned loans holding that the lenders of the assessee

therein have unexplained credits in their bank accounts etc and they did

not had sufficient income source to justify their creditworthiness. We find

in the present case the AO also doubted the creditworthiness of the lenders

of unsecured loans and clearly held that they did not have creditworthiness

substantiating the unsecured loans given to assessee. In this regard, the

Tribunal also held that the revenue has no authority to ask for source of

source of the said loans and prior to insertion of first proviso of Finance Act,

2022, once the lender was identifiable and if the amounts were disbursed

through banking channels, the loans u/s. 68 of the Act were liable to be

accepted in the hands of assessee. Therefore, the loans in the hands of

8 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 assessee u/s. 68 of the Act is liable to be accepted in view of the findings

of the Tribunal in the case of M/s, Anbu Educational Trust (Supra).

cannot be subject matter of addition u/s. 68 of the Act. The ld.AR placed

on record chart with reference to all the parties showing their opening

balances which is reproduced herein below for ready reference:

S.No Name of A B C D E Creditor Opening Fresh Interest Interest TDS balances Loans Credited paid payable introduced during during (Debit) in AY 2022- the year the year 23 1 Chunnilal 22,22,000 Bagmar & Sons 2 Chunnilal 16,66,500 1,99,980 19,998 Jatanraj 3 Devraj Mahendra 15,00,000 1,62,000 1,62,000 Kumar 4 Latha Kawar 40,00,000 13,00,000 5,10,390 3,10,390 5 Priyanka Bagmar 35,24,650 1,75,350 6 Sadhana Kawar 30,00,000 53,00,000 5,97,690 2,97,690 7 Vijayraj Ashish 23,00,000 2,48,400 2,48,400 Kumar Total 1,46,88,500 1,01,24,650 18,93,810 10,18,480 19,998

Chunnilal Bagmar & Sons shown opening balance as on 31.03.2022 to an

extent of Rs.22,22,000/-. We find the details of said party from page nos 1

to 11 in paperbook-II. On perusal of the same, we find at page no.1 of the

paper book-II that the AO issued notice u/s. 133(6) of the Act to the

9 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 Chunnilal Bagmar & Sons on 01.03.2024 having DIN in

ITBA/AST/S/133(6)/2023-24/1061836777(1), wherein at sl.no.1 the AO

asked the said party to furnish details of nature of amount of

loans/advanced to the assessee alongwith documentary evidence.

Further, on perusal of the e-Proceedings Response Acknowledgement

dated 07.03.2024 at page no.4 of the paper book-II, we find the said

Chunnilal Bagmar & Sons furnished details to the AO by stating “as

required by you we are enclosing herewith confirmation of accounts, Form

16A and copy of bank statement in response to notice u/s. 133(6) of the

Act.” Further, at page no.6 we find ledger account of the assessee in the

books of Chunnilal Bagmar & Sons confirming opening balance of

Rs.22,22,000/- as on 31.03.2022. Further, we find the TDS Traces at page

no.7 to 10 and further bank statement at page no.11 of the paper book-II

which clearly shows that first party furnished every detail in response to the

notice u/s. 133(6) of the Act, particularly proving the opening balance as

contended by the ld.AR, before the AO. Therefore, the addition as made

by the AO u/s. 68 of the Act with reference to opening balance, in our

opinion, is not justified.

Jatanraj shown opening balance as on 31.03.2022 to an extent of

10 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 Rs.16,66,500/-. We find the details of said party from page nos 12 to 22 in

paperbook-II. On perusal of the same, we find at page no.12 of the paper

book-II that the AO issued notice u/s. 133(6) of the Act to the Chunnilal

Jatanraj on 28.02.2024 having DIN in ITBA/AST/S/133(6)/2023-

24/1061650003(1), wherein at sl.no.1 the AO asked the said party to

furnish details of nature of amount of loans/advanced to the assessee

alongwith documentary evidence. Further, on perusal of the e-Proceedings

Response Acknowledgement dated 07.03.2024 at page no.15 of the paper

book-II, we find the said Chunnilal Jatanraj furnished details to the AO by

stating “as required by you we are enclosing herewith confirmation of

accounts, Form 16A and copy of bank statement in response to notice u/s.

133(6) of the Act.” Further, at page no.17 we find ledger account of the

assessee in the books of Chunnilal Jatanraj confirming opening balance of

Rs.16,65,500/- as on 31.03.2022. Further, we find the TDS Traces at page

no.18 to 21 and further bank statement at page no.22 of the paper book-II,

which clearly shows that the second party furnished every detail in

response to the notice u/s. 133(6) of the Act, particularly proving the

opening balance as contended by the ld.AR, before the AO. Therefore, the

addition as made by the AO u/s. 68 of the Act with reference to opening

balance, in our opinion, is not justified.

11 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 13. Further, it is noted that for the third party by name Mahendra Kumar

shown opening balance as on 31.03.2022 to an extent of Rs.15,00,000/-.

We find the details of said party from page nos 23 to 36 in paperbook-II.

On perusal of the same, we find at page no.23 of the paper book-II that the

AO issued notice u/s. 133(6) of the Act to the Mahendra Kumar on

01.03.2024 having DIN in ITBA/AST/S/133(6)/2023-24/1061836712(1),

wherein at sl.no.1 the AO asked the said party to furnish details of nature

of amount of loans/advanced to the assessee alongwith documentary

evidence. Further, on perusal of the e-Proceedings Response

Acknowledgement dated 14.03.2024 at page no.26 of the paper book-II,

we find the said Mahendra Kumar furnished details to the AO by stating “I

have financed a sum of Rs.15,00,000/- to Vijetha Gold LLP. I herewith

enclosing the account copy for your reference and the Bank statement of

the specified transactions”. Further, at page no.33 we find ledger account

of the assessee in the books of Mahendra Kumar confirming opening

balance of Rs.15,00,000/- as on 31.03.2022. Further, we find bank

statement at page nos. 34 to 36 of the paper book-II, which clearly shows

that the third party furnished every detail in response to the notice u/s.

133(6) of the Act, particularly proving the opening balance as contended

by the ld.AR, before the AO. Therefore, the addition as made by the AO

12 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 u/s. 68 of the Act with reference to opening balance, in our opinion, is not

justified.

shown opening balance as on 31.03.2022 to an extent of Rs.40,00,000/-.

We find the details of said party from page nos 37 to 52 in paperbook-II.

On perusal of the same, we find at page no.37 of the paper book-II that the

AO issued notice u/s. 133(6) of the Act to the Latha Kawer on 01.03.2024

having DIN in ITBA/AST/S/133(6)/2023-24/1061836727(1), wherein at

sl.no.1 the AO asked the said party to furnish details of nature of amount

of loans/advanced to the assessee alongwith documentary evidence.

Further, on perusal of the e-Proceedings Response Acknowledgement

dated 07.03.2024 at page no.40 of the paper book-II, we find the said Latha

Kawer furnished details to the AO by stating “as required by you we are

enclosing herewith confirmation of accounts, Form 16A and copy of bank

statement in response to notice u/s. 133(6) of the Act.” Further, at page

no.42 we find ledger account of the assessee in the books of Latha Kawer

confirming opening balance of Rs.40,00,000/- as on 31.03.2022. Further,

we find the TDS Traces at page nos 43 to 46 and further bank statement

at page nos 47 to 50 of the paper book-II, which clearly shows that fourth

party furnished every detail in response to the notice u/s. 133(6) of the Act,

13 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 particularly proving the opening balance as contended by the ld.AR, before

the AO. Therefore, the addition as made by the AO u/s. 68 of the Act with

reference to opening balance, in our opinion, is not justified.

the details of which are from page nos 53 to 66 in paperbook-II. On perusal

of the same, we find at page no.53 of the paper book-II that the AO issued

notice u/s. 133(6) of the Act to the Priyanka Bagmar on 01.03.2024 having

DIN in ITBA/AST/S/133(6)/2023-24/1061836744(1), wherein at sl.no.1 the

AO asked the said party for furnish details of nature of amount of

loans/advanced to the assessee alongwith documentary evidence.

Further, on perusal of the e-Proceedings Response Acknowledgement

dated 07.03.2024 at page no. 56 of the paper book-II, we find the said

Priyanka Bagmar furnished details to the AO by stating “kindly find

enclosed the confirmation of Accounts w.r.t to Vijetha Gold LLP for FY

2021-22 /AY 2022-23 along with my Bank Statement and Form 16A and

ITR Acknowledgement and Computation of Income and Balance Sheet and

profit and loss and PAN and Aadhar for your quick reference.” Further, at

page no.60 we find ledger account of the assessee in the books of Priyanka

Bagmar confirming transfer of Rs.35,00,000/- on 18.10.2021 to assessee

through banking channel. Further, we find the bank statement at page

14 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 no.61 showing the said transfer and Income Tax Return Acknowledgment

at Page no. 63 and Income statement, P&L account and balance sheet as

on 31.03.2022 from page nos. 64 to 66 of the paper book-II, which clearly

shows the fifth party furnished every details proving the identity,

creditworthiness and genuineness of transactions as contended by the

ld.AR , before the AO. Therefore, the addition as made by the AO u/s. 68

of the Act with reference to creditworthiness, in our opinion, is not justified.

shown opening balance as on 31.03.2022 to an extent of Rs.30,00,000/-.

We find the details of said party from page nos 67 to 90 in paperbook-II.

On perusal of the same, we find at page no.67 of the paper book-II that the

AO issued notice u/s. 133(6) of the Act to the Sadhna Kavar on 01.03.2024

having DIN in ITBA/AST/S/133(6)/2023-24/1061836760(1), wherein at

sl.no.1 the AO asked the said party to furnish details of nature of amount

of loans/advanced to the assessee alongwith documentary evidence.

Further, on perusal of the e-Proceedings Response Acknowledgement

dated 07.03.2024 at page no.70 of the paper book-II, we find the said

Sadhna Kavar furnished details to the AO by stating “as required by you

we are enclosing herewith confirmation of accounts, Form 16A and copy of

bank statement in response to notice u/s. 133(6) of the Act.” Further, at

15 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 page no.72 we find ledger account of the assessee in the books of Sadhna

Kavar confirming opening balance of Rs.30,00,000/- as on 31.03.2022.

Further, we find the TDS Traces at page nos 73 to 77 and further bank

statement at page nos 78 to 90 of the paper book-II, which clearly shows

that the sixth party furnished every detail in response to the notice u/s.

133(6) of the Act, particularly proving the opening balance as contended

by the ld.AR, before the AO. Therefore, the addition as made by the AO

u/s. 68 of the Act with reference to opening balance, in our opinion, is not

justified.

Kumar shown opening balance as on 31.03.2022 to an extent of

Rs.23,00,000/-. We find the details of said party from page nos 91 to 101

in paperbook-II. On perusal of the same, we find at page no.91 of the paper

book-II that the AO issued notice u/s. 133(6) of the Act to the Sadhna Kavar

on 01.03.2024 having DIN in ITBA/AST/S/133(6)/2023-24/1061836765(1),

wherein at sl.no.1 the AO asked the said party to for furnish details of nature

of amount of loans/advanced to the assessee alongwith documentary

evidence. Further, on perusal of the e-Proceedings Response

Acknowledgement dated 07.03.2024 at page no.94 of the paper book-II,

we find the said Sadhna Kavar furnished details to the AO by stating “as

16 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 required by you we are enclosing herewith confirmation of accounts, Form

16A and copy of bank statement in response to notice u/s. 133(6) of the

Act.” Further, at page no.96 we find ledger account of the assessee in the

books of Vijayraj Ashish Kumar confirming opening balance of

Rs.23,00,000/- as on 31.03.2022. Further, we find the TDS Traces at page

nos 97 to 100 of the paper book-II, which clearly shows that the seventh

party furnished every detail in response to notice u/s. 133(6) of the Act,

particularly proving the opening balance as contended by the ld.AR, before

the AO. Therefore, the addition as made by the AO u/s. 68 of the Act with

reference to opening balance, in our opinion, is not justified, for which ld.AR

relied on decision of Hon’ble High Court of Delhi in the case of Sheela

Overseas Pvt Ltd. The relevant part of which is reproduced herein below:

“18. Having stated the above, we also find that the Assessee had produced sufficient material in support of its explanation. As noted by the Tribunal, the Assessee was required to establish (a) the identity of the source; (b) capacity of such source; and (c) the genuineness of the transaction. 19. In the present case, it is clear that the Assessee had discharged the said burden. As noted above, there is no cavil as to the identity of the person who had extended the unsecured loan reflected as outstanding in the books of account of the Assessee. The Assessee had explained that the funds had been lent by its director - Mr. Hitesh Bhatia. 20. Additionally, the Assessee produced relevant documents to show that funds had been received through banking channels from the bank account of Mr. Hitesh Bhatia. Insofar as the genuineness of the transaction is concerned, there is material on record to indicate that the amount credited in the books of account, which has been reflected as loans from Mr. Hitesh Bhatia were unsecured loans. Mr. Bhatia had also confirmed the same. He is not a stranger to the Assessee and is vitally interested in the affairs of the Assessee. Therefore, the financial assistance extended by him cannot be doubted.

17 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 21. The only remaining issue in this regard is the capacity of Mr. Hitesh Bhatia to lend the funds to the Assessee. Here too, we find no ground to doubt the capacity of Mr. Hitesh Bhatia to extend the unsecured loan to the Assessee. There is no dispute that the amount received by the Assessee was provided from the overdraft facility extended by Lakshmi Vilas Bank. The Assessee also produced the certificate which established that Lakshmi Vilas Bank had extended the overdraft facility to Mr. Hitesh Bhatia. The said overdraft facility was provided against the fixed deposits maintained by Mr. Hitesh Bhatia and therefore, his capacity to pay the amount stands established. The overdraft facility extended by the Lakshmi Vilas Bank was secured by the assets of Mr. Hitesh Bhatia. 22. The additions made to the income of the Assessee are solely on account of certain cash deposits by Mr. Hitesh Bhatia in his bank account during the relevant period from 13.09.2014 to 22.12.2014. Any doubt as to the source of funds used by Mr. Hitesh Bhatia to discharge his liability to Lakshmi Vilas Bank cannot be a ground to make an addition of unexplained credit in the hands of the Assessee. The unsecured loan amount, as reflected by the Assessee in its books of account, has been duly explained. The source of the source of the funds has also been established as the overdraft from Lakshmi Vilas Bank. Any further explanation regarding the cash credited in the books of Mr. Hitesh Bhatia for neutralizing any part or whole of its overdraft facility from Lakshmi Vilas Bank, is a matter which is required to be examined in the assessment proceedings of Mr. Hitesh Bhatia and not that of the Assessee. 23. Having stated above, we find that Assessee also explained that Mr. Hitesh Bhatia had an opening balance of ₹26,50,637/- in his books; therefore, even the source of the cash deposited in the bank account was explainable. At this stage, it is also relevant to note that it was also pointed out that Mr. Hitesh Bhatia is a regular assessee and had filed its return of income for AY 2015-16 declaring the income of ₹9,05,220/-.”

of Delhi was pleased to hold when the disputed unsecured loans received

by the assessee from overdraft facility supported by certificate issued by

said bank, the capacity to pay loan amount stands established. Further,

any doubt as to the source of funds to discharge liability to the said bank

cannot be a ground to make an addition of unexplained credit in hands of

the assessee therein. Further, it was held when the unsecured loan

18 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 amount as reflected by the assessee in its books of accounts has been duly

explained as the assessee produced relevant documents to show that the

funds even received through bank channels. Coming to the facts on hand,

we note that the AO sought details in respect of unsecured loans vide

notice issued u/s. 133(6) of the Act, all by even dated 01.03.2024 and the

assessee furnished all the details regarding identity by furnishing PAN and

Aadhar and bank statement for genuineness of transactions, confirmation

of ledgers, income-tax return, computation of income, profit & loss and

balance sheet for creditworthiness of the said parties, which clearly

establishes that the assessee discharged its onus in explaining source of

unsecured loans and therefore, the order of the ld.CIT(A) confirming the

view of the AO in making the addition u/s. 68 of the Act on account of

unexplained credit, in our opinion, is not justified. Therefore, the argument

of the ld.DR in remanding the matter to the file of the ld.CIT(A) is rejected.

Thus, we find facts and circumstances of the present case are similar to

the facts before Hon’ble High Court of Delhi in the case of Seela Overseas

Pvt Ltd (Supra), and respectfully following the same, we hold that the

opening balance stands in the books of accounts of assessee in respect of

all the parties stands explained and no addition u/s. 68 of the Act is not

justified. Thus, order of the ld.CIT(A) is set aside and grounds raised by

the assessee are allowed.

19 I.T.A. No. I.T.A. No.136 I.T.A. No. I.T.A. No. 136 136/Chny/2 136 /Chny/2 /Chny/2026 /Chny/2 026 026 026 19. In the result, appeal filed by the assessee is allowed. Order pronounced on 29th June, 2026 at Chennai.

Sd/- Sd/- (S.R. RAGHUNATHA) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated: 29.06.2026 JPV आदेश की )ितिलिप अ0ेिषत/Copy to: 1. अपीलाथ(/Appellant, 2. )*थ(/ Respondent, 3. आयकर आयु1/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय )ितिनिध/DR & 5. गाड& फाईल/GF.

PRASANNA Digitally signed by PRASANNA VANI JETTY VANI JETTY Date: 2026.06.30 15:41:15 +05'30'