MR. BHIKCHAND UMEDMALJI MUNOT,MUMBAI vs. ITO WARD-19(1)(2), MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of learned Commissioner (Appeals) dated 29th August 2025 for assessment year 2012- 13. Though, the assessee has raised multiple grounds of appeal, however in our considered view the substantial grounds of appeal relates to validity of reopening under section 148 and addition on merit on account of disallowance of unsecured loan of ₹ 30.00 lakhs. Rest of the grounds of appeal are either narration of facts or argumentative in nature. 2. Rival submissions of both the parties have been heard on record perused. The learned authorised representative (AR) of the assessee submits that assessee is in the business of Ferrous and Nonferrous items in steel business. The

assessee is running its proprietary firm in the name of Satellite Industries. The assessing officer reopened the case of assessee on the basis of information from Investigation wing that assessee has availed accommodation entry in the form of bogus purchases/unsecured loan without verifying the fact. The information was vague; no verification of fact was carried out by assessing officer. The assessee furnish complete details of unsecured loan availed by assessee from Marine Gems Private Limited during the relevant financial year. The assessee furnished the details of unsecured loan of ₹ 30.00 lakhs. The assessee also furnished the name address and complete details of lender and in discharge of his onus proved the identity, creditworthiness and genuineness of transaction. The assessee made payment of interest on unsecured loan after making TDS. The assessing officer disregarded all the submission and made addition solely on the basis of information available with him. The assessee specifically contended that the unsecured loan received by assessee was repaid much prior to initiation of reassessment proceeding. Before learned Commissioner (Appeals) the assessee again furnished complete details and contended that unsecured loan has been fully repaid on 11 January 2013. The assessee furnished his bank statement and bank statement of lender to show the repayment, which is not disputed by assessing officer. Once the repayment is not disputed by lower authorities, the genuineness of transaction of unsecured loan cannot be disputed, which is otherwise fully supported by sufficient evidence. The assessee also made payment of interest from time to time. The learned AR of the assessee submits that Hon’ble jurisdictional High Court in HR Mehta versus ACIT in Income Tax Appeal No. 58 of 2001 in order dated 30 June 2016 has held that 2

when monies were advanced separately by way of account pay cheque and was repaid vide account pay cheque the least the revenue should have done was to grant an opportunity to assessee to meet the case against him by providing material sought to be used against the assessee in arriving before passing the reassessment order. The learned AR further submit that similar view was taken by Hon’ble Gujarat High Court in CIT versus Aayachi Chandrasekhar Narsangji reported in(2014) 42 taxmann.com 251(Gujarat) that where the department has accepted repayment of loan in subsequent year, no addition was to be made in current year on account of cash credit. The learned AR of the assessee submits that once the assessee discharge his primary onus in substantiating the genuineness of transaction of loan, the burden shifted on the revenue to prove it otherwise. The revenue/assessing officer has not carried out an investigation of factsexcept relying upon the general information received from investigation wing. The learned AR of the assessee submits that he has good case on merit as well as on validity of reopening. 3. On the other hand, the learned Senior Departmental representative (Sr DR) for the revenue supported the order of lower authorities. The learned SR DR for the revenue submits that assessing officer was having sufficient information in his possession that a search action was carried out on Gautam Jain group. Gautam Jain group was engaged in providing accommodation entry of sale or purchase of diamonds or entry of long term or short term capital gain as well as entry of unsecured loan on commission basis. No genuine activities were carried out by Gautam Jain and is associate. The assessing officer was having information 3

We find that plea of repayment of loan has been taken by assessee right from the beginning. We further find that co-ordinate bench of Mumbai Tribunal in Rajuram Savaji Purohit vs ITO [2024] 169 taxmann.com 18 (Mumbai - Trib.) by following the decision of Hon’ble Jurisdictional High Court in H R Mehta vs ACIT (supra) also held where assessee had taken loan from a company and all ingredients of a genuine loan transaction like loan taken and even its repayment by assessee were through banking channels and identity of lender, genuineness of transaction as also credit worthiness of lender had not been disproved by Assessing Officer, impugned loan could not be treated as unexplained credit. We have perused the bank statement of lender and the assessee wherein loan has been repaid by way of banking transaction on 11.02.2013. Thus, in view of aforesaid factual and legal discussion, we do not find any justification of making addition of unexplained credit. In the result, the addition on merit is deleted. Considering the fact that we have deleted the addition on merit, therefore, adjudication on legal issue on reopening has become academic. 5. In the result of appeal of the assessee is allowed

Order was pronounced in open court on 09/06/2026.

Sd/- Sd/- MAKARAND VASANT MAHADEOKAR PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, Dated: 09/06/2026 Biswajit

Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file.

By order

Assistant Registrar/DDO ITAT, Mumbai