DIVINE CONSTRUCTION,VASAI vs. ITO, WARD 1, PALGHAR, PALGHAR

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “D” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.867/MUM/2026 (AY:2022-23) Divine Construction, vs. ITO, Ward 1, Palghar, Shop No. 5, Wing A, The Wood, Bidco Road, Udhyog Nagar, Palghar, Junipar, Brahman Ali, Pady, Vasai, Pin 401404, Palghar-401404. Pin 401207, Palghar-401207. PAN/GIR No: AAQFD9182J (Appellant) (Respondent) Assessee by Shri Subodh Ratnaparkhi, CA Revenue by Shri Annavaram Kosuri ( SR. DR) Date of Hearing 28.04.2026 Date of Pronouncement .06.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

This appeal filed by the assessee emanates from the order passed under

section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the National Faceless

Appeal Centre [in short, ‘CIT(A)’], dated 10.12.2025 for the assessment year

(AY) 2022-23.

“1. The Hon CIT(A) erred in upholding the addition of Rs.1,45,10,500/- made u/s 68 r.w.s. 115BBE of the I.T Act 1961, as unexplained cash credit in respect of booking advances received from 7 prospective customers of the real estate project under development, not appreciating that the onus placed by section 68 of the I.T Act, 1961 stood discharged by the appellant by placing on record all the requisite evidences and the say of the Id AO/Hon CIT(A) attributing any failure to the appellant is not justified and hence the said addition of Rs.1,45,10,500/- is required to be deleted.

ITA No.867/MUM/2026 Divine Construction 3. Facts of the case, in brief, are that the assessee filed return of income for

the AY 2022-23 on 30.07.2022 declaring total income at Rs.Nil. The return was

processed u/s 143(1)(a) of the Act on 11.10.2022. The case was selected for

scrutiny and various opportunities were granted to the assessee, in response to

which the assessee had filed various details. According to the AO, the assessee

has received unsecured loans of Rs.1,45,10,500/- from seven individuals. After

considering the reply of the assessee, the AO observed that the assessee has not

been able to prove the identity and creditworthiness of the loan creditors and the

genuineness of the transactions. Accordingly, the amount of Rs.1,45,10,500/- was

added u/s 68 of the Act.

The submission of the assessee is reproduced at para 5.1 of the appellate order.

Thereafter, the CIT(A) has discussed provisions of section 68 of the Act and various

judgements on the subject issue and held that the AO was factually and legally

correct in making the impugned addition. Accordingly, the appeal was dismissed.

Tribunal. The Ld. AR has filed a paper book and submitted that the amount added

by the AO are not unsecured loans but booking advances received from seven

customers for booking of flats of a project under development by the appellant.

The assessee had given confirmation from the seven parties, ledger accounts in

the books of the appellant, bank statements of the parties highlighting the

ITA No.867/MUM/2026 Divine Construction payment of the advance and income-tax returns by the said parties. Therefore,

the assessee has discharged the onus cast on it. The Ld. AR has enclosed such

details in the paper book filed before us and submitted that the impugned

payments were received towards booking of the flats. He submitted that neither

the AO nor the CIT(A) have verified the details furnished to them and have added

the impugned sum in a mechanical manner. He requested to delete such addition.

however, suggested that the matter may be set aside to the file of AO for

verification of the details.

that comprehensive details had been submitted by the assessee before the AO

during the assessment proceedings. The appellant had submitted

confirmation/request letters for purchase of the flats along with acceptance letter

from the appellant, ledger account of the impugned customers in the books of

the appellant, bank statements of the parties highlighting the payment of the

advance to the appellant and ITRs of the parties for AY 2020-21, 2021-22 and

2022-23 to the AO during the assessment proceedings. The Ld. AR submitted that

the observation of AO that bank statements were not submitted is factually

incorrect because the assessee has uploaded bank statements of the disputed

parties during assessment proceedings. Therefore, it is clear that details to prove

all three ingredients of section 68 of the Act, namely identity of the creditors,

ITA No.867/MUM/2026 Divine Construction

capacity of the creditors, genuineness of the creditors had been duly filed by the

assessee before the AO/CIT(A). However, these details were not considered by

both authorities. If the AO was not satisfied with the details, he could have

conducted further inquiry before making the addition, which he failed to do. The

CIT(A) has also mechanically sustained the addition without appreciating the

details furnished by the assessee. Therefore, in the interest of justice, we set aside

the order of CIT(A) and restore the matter to the file of AO for necessary

verification and decision in accordance with law. The AO shall offered adequate

and reasonable opportunity of being heard to the assessee. Accordingly, the

grounds are allowed for statistical purpose.

Order is pronounced on .06.2026.

(SANDEEP GOSAIN) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER *Aniket Chand; Sr. PS MUMBAI Date: .06.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File By Order Assistant Registrar ITAT, MUMBAI

ITA No.867/MUM/2026 Divine Construction

Date Initial 1. Draft dictated on (dictation sheet is enclosed with main file.) } PS 2. Draft placed before author PS 3. Draft proposed & placed before the second member 4. Draft discussed/approved by Second Member.