ASSISTANT COMMISSIONER OF INCOME TAX, NEW DELHI vs. JAGRITI PLASTICS LIMITED, NEW DELHI

1 ITA No. 4978/DEL/2024 & C.O No. 50/Dl/2025 ACIT Vs Jagriti Plastics Ltd.

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI BENCH ‘C’: NEW DELHI BEFORE YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 4978/DEL/2024 (A.Y. 2016-17) Assistant Commissioner of Vs Jagriti Plastics Limited Income Tax, room No. 316A, C. 405, 4th Floor, Pearls Omaxe R. Building, I. P. Estate, New Tower-1, Plot No. B1, Netaji Delhi-110002, Subhash Place, Maurya Enclave, North West Delhi PAN: AAACJ0165A Appellant Respondent C.O No. 50/DEL/2025 in ITA No. 4978/Del/2024 Jagriti Plastics Limited Vs Assistant Commissioner of 405, 4th Floor, Pearls Omaxe Income Tax, room No. 316A, C. Tower-1, Plot No. B1, Netaji R. Building, I. P. Estate, New Subhash Place, Maurya Delhi-110002, Enclave, North West Delhi PAN: AAACJ0165A Appellant Respondent Assessee by Sh. C. S. Anand, Adv & Ms. Vaishnavi Yadav, Adv Revenue by Sh. Dayainder Singh Sidhu, CIT DR Date of Hearing 24/03/2026 Date of Pronouncement 21/05/2026 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Revenue and the Cross Objection

is filed by the Assessee against the order of Ld. Commissioner of Income

Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for

short), New Delhi dated 29/08/2024 pertaining to Assessment Year

2016-17.

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4,28,62,410/- for the year under consideration. The case of the Assessee

was selected for scrutiny under CASS and an assessment under Section

143(3) was completed on 31/05/2018 by acceptingreturned income.

Based on the information handed over by DCIT, Circler 13(1), the

Assessee case was reopened on the ground that unsecured loans were

taken by the Assessee from the lenders who have been showing either

loss or normal income for their Income Tax Returns. An assessment

order came to be passed on 31/03/2022 by making an addition of Rs.

12,98,00,000/- on account of unsecured loans. Aggrieved by the

assessment order dated 31/03/2022, Assessee preferred an Appeal

before the Ld. CIT(A). The Ld. CIT(A) vice order dated 29/08/2024,

allowed the Appeal of the Assessee by deleting the addition. As against

the order of the Ld. CIT(A), the Revenue preferred the captioned Appeal in

ITA No. 4978/Del/2024 and the Assessee filed Cross Objection No.

50/Del/2025.

Appeal of the Revenue, submitted that the Ld. CIT(A) has committed

error in deleting the addition of Rs. 12,98,00,000/- made on account of

unexplained money in the form of unsecured loan under Section 69A of

the Act, though the creditworthiness of the lenders of unsecured loans

3 ITA No. 4978/DEL/2024 & C.O No. 50/Dl/2025 ACIT Vs Jagriti Plastics Ltd.

and the genuineness of the transaction were not proved. Further

submittedthat the Ld. CIT(A) has also erred in ignoring the fact that the

lender entities either have low income or were having booking loss during

the assessment year underconsideration. Thus, submitted that the order

of the Ld. CIT(A) is erroneous and deserves to be set aside.

Ld. CIT(A) while deleting the addition has examined all 9 lenders, the

financial transactions were done through banking channel and interest

was also paid which was subject to TDS. Further submitted that the Ld.

CIT(A) has relied on the ratio laid down by the Jurisdictional High Court

in the case of CIT vs. Vrindavan Farms (P) Ltd. [2016] 6 ITR-OL 182 (Del),

thus submitted that the order of the Ld. CIT(A) requires no interference

at the hands of the Tribunal. Therefore, sought for dismissal of the

Appeal of the Revenue.

on record. The Ld. CIT(A) deleted the addition made by the A.O. in

following manners:

“5.1 It appears from the record that the Appellant raised the grounds No. 1 to 5 in respect of legal notice. I find there is no infirmity in the action of the AO in this regard. Hence, the grounds no. 1 to 5 are dismissed.

4 ITA No. 4978/DEL/2024 & C.O No. 50/Dl/2025 ACIT Vs Jagriti Plastics Ltd.

5.2 In grounds no 6 to 10, the appellant challenged the addition of Rs. 12,98,00,000/- as well as applicability of section 69A.

5.3 After going through the assessment order, the submissions made by the Appellant in para 19 to 42 of its letter dated 24/08/2024 and the documents placed on record, I observed that the AO made the addition by doubting the creditworthiness of the 9 parties primarily on the ground of low income returned in the ITR. The Appellant made factual submissions with regard to all the 9 parties separately. I have analyzed the details/data with regard to all the 9 parties as under:

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In para 5.9 regarding this party, the AO mentioned that no reply to the notice u/s 133(6) issued is received. To counter such comment of the AO, the Appellant provided the proof of filing the reply to notice u/s 133(6) by Tarini Enterprises Ltd. as Exhibit -D.

5.4 I have found that in all 9 cases- the financial transactions happened only through banking system, interest was paid which was subjected to TDS, the lenders were corporate entities, ITR acknowledgements for A.Y.- 2016-17 of the lenders were provided confirmation with audited financials of the lenders were provided and the bank statements of the lenders showing financial transactions with the appellant were provided. Moreover, the notices issued u/s 133(6) were responded by all the 9 lenders. It is contradictory on the part of the AO that at one end he made addition of the amounts received by the Appellant in F.Y. 2015-16 and on another end allowed the claim of the Appellant on account of interest paid to the lenders for F.Y.- 2015-16. After analysing the financial data pertaining to all the 9 parties, I am finding myself convinced with their creditworthiness. I am not convinced with the view adopted by the AO for doubting the creditworthiness on account of low income refurned by the lenders. My view is strengthened from the judgement of jurisdictional High Court (Delhi High Court) in CIT vs. Vrindavan Farms Pvt. Ltd. [2016] 6 ITR-OL 502 (Del) wherein the Court dismissed the departmental appeal by recording that it has been rightly commented by the Income-Tax Appellate Tribunal that without doubting the

11 ITA No. 4978/DEL/2024 & C.O No. 50/Dl/2025 ACIT Vs Jagriti Plastics Ltd.

documents, the Assessing Officer completed the assessment only on the presumption that low return of income was sufficient to doubt the creditworthiness. I am not in agreement with the AO who while commenting on M/s Jagriti Marketing Pvt. Ltd. made a special comment that interest expenses booked is Rs.26,70,797/-while interest income received is Rs.3,72,920/- and while commenting on M/s Jagriti Petrochem Pvt. Ltd. made a comment that interest expenses booked is Rs.27,00,000/- while interest income received is Rs.6,79,800/- because this aspect has nothing to do with the creditworthiness of the lenders, more particularly with regard to the assessment proceedings in the case of the Appellant. Further vide para 33 of its letter, the Appellant clarified that the entire amount of Rs.26,43,297/-represented the interest income. Similarly, vide para 34 of its letter, the Appellant clarified that the entire amount of Rs.24,44,729/- represented the interest income. Considering the above, I delete the addition of Rs. 12,98,00,000/- made by the AO in the Assessment Order.”

has verified the genuineness and the creditworthiness of all 9lenders

and found that the financial transactionwere done

throughbankingchannel, interest to the loan were duly paid which was

subject to TDS.Further observed that, the lenders being corporate

entities have provided the confirmation of the loans with audited

financials of the lenders, bank statements. It is also relevant to note

that the notice before u/s 133(6) of the Act by the A.O. were duly

responded by all the 9 lenders. The A.O. on the one hand made addition

of amount received by the Assessee in Financial Year 2015-16 and on the

other hand allowed the claim of the Assessee on account of interest paid

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to the lenders for Financial Year 2015-16. The Ld. CIT(A) after analyzing

the financial data of all 9 parties convinced with the creditworthiness of

the lenders. The Department has not brought any material on record to

contradict the findings of the Ld. CIT(A). At no point of time, the A.O.

has doubted the documents produced by the Assessee and the additions

have been made by the A.O. only on the presumption that low return of

income,which is not sufficient to doubt the creditworthiness. In view of

the above, the Revenue failed to either contradict or prove otherwise of

the findings of the Ld. CIT(A). in view of the above, we find no merits in

the Grounds of Appeal of the Revenue. Accordingly the Grounds of

Appeal of the Revenue are hereby dismissed.

50/Del/2025 filed by the Assessee dismissed for having become in-

fructuous.

Order pronounced in the open court on 21st May, 2026

Sd/- Sd/- (MANISH AGARWAL) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 21.05.2026 Reshma Naheed, Sr.P.S Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

13 ITA No. 4978/DEL/2024 & C.O No. 50/Dl/2025 ACIT Vs Jagriti Plastics Ltd.

ASSISTANT REGISTRAR ITAT, NEW DELHI