RIDHIRAJ BUILDERS LLP,JAIPUR vs. INCOME TAX OFFICER WARD 1(3), JAIPUR

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ITA 1385/JPR/2025Status: DisposedITAT Jaipur31 August 2026AY 2015-166 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal deleted the addition made by the lower authorities, finding that the loan was genuine, transacted through banking channels, and repaid with interest within the same financial year. The Tribunal relied on judicial precedents supporting the deletion of additions in such cases.

What were the facts?

The assessee firm declared NIL income for AY 2015-16. The AO reopened the assessment based on information about bogus loans and made an addition of Rs. 50,00,116/- under Section 68. The CIT(A) partially allowed the appeal, reducing the addition to 8% of the amount.

What were the issues?

Whether the addition under Section 68 for alleged bogus loans is sustainable when the loan was transacted through banking channels and repaid with interest. Also, the validity of the reassessment notice was challenged on grounds of limitation, jurisdiction, and absence of DIN.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 148A,Section 148,Section 68,Section 115BBE,Section 149(1),Section 151A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, JAIPUR

Before: Shri T.R. Senthil Kumar & Shri Prakash

For Appellant: Shri Surendra Shah, CA
For Respondent: Shri Abhimanyu Singh

आदेश/ORDER

PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the assessee as against the appellate order dated 28.08.2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Center, Delhi (in short referred to as “CIT”), arising out of the ex-parte reassessment order passed under section 144 r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2015-16.

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2.

The brief facts of the case are that the assessee is a firm engaged in developing residential units, filed its return of income for AY 2015- 16 on 30.09.2015 declaring NIL income. An information received from Investigation Wing that the assessee is a beneficiary of bogus loans from Banka Group amounting Rs. 50,00,116/-. Therefore, the assessment was reopened by issuing notice u/s. 148A(b) of the Act. The reply filed by the assessee was considered and issued notice u/s. 148 of the Act.

2.1. During the reassessment proceedings, the assessee submitted that he has availed loan on 13.10.2014 by two RTGS transactions amounting Rs. 24 lakhs and 26 lakhs and the loan was repaid on 13.02.2015 by RTGS with interest of Rs. 2 lakhs totaling Rs. 52 lakhs. Thus, the assessee requested to drop the reassessment proceedings. However, the AO not satisfied with the reply of assessee, made addition of Rs. 50,00,116/- as unexplained money u/s. 68 of the Act and charged to tax u/s. 115BBE of the Act.

3.

Aggrieved against the reassessment order, assessee filed appeal before Ld. CIT(A) and reiterated the same submissions and documents, however Ld. CIT(A) partially allowed the appeal of the assessee by reducing addition to 8% of Rs. 50,00,116/-.

4.

Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal:-

1.

"That the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi has erred in law and facts of the matter while not quashing the notice issued on 27.07.2022 u/s. 148 of the Act being barred by limitation in view of the first proviso to S. 149(1) of the Act and as such the notice issued u/s. 148 is bad in law and deserves to be quashed."

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2.

"That the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi has erred in law and facts of the matter while not quashing the notice issued on 27.07.2022 u/s. 148 of the Act being issued by the Jurisdictional Assessing Officer in place of Faceless Assessing Officer which is not in accordance with the provisions of Section 151A of the Act read with the E Assessment Scheme dated 29th March 2022 and as such the notice issued u/s. 148 is bad in law and deserves to be quashed."

3.

"That the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi has erred in law and facts of the matter while not quashing the notice issued on 27.07.2022 u/s. 148 of the Act as the same has been issued without DIN and is therefore in violation of Circular No. 19 of 2019 dated 14.08.2019 issued by CBDT and as such the notice issued u/s. 148 is bad in law and deserves to be quashed."

4.

"That the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi has grossly erred in law and facts of the matter in restricting the addition of Rs 50,00,116.00 made by Ld AO to 8% of transaction amount of Rs 50,00,116.00 by holding that a portion of the transaction amount accrued to the assessee as commission income. "

5.

Heard the rival submissions and perused the materials placed on record including the paper book filed by the assessee. The assessee placed on record letter from the lender company confirming all accounts and bank statements of loan transactions and repayment of loan with interest amount of Rs. 2 lakhs. The assessee also submitted before Ld. CIT(A) as follows:-

“…….4.8 That the assessee had taken loan through banking channel and repaid the same after 4 months along with interest through banking channel and deducted TDS on the interest. The Ld. AO has not disturbed the interest amount of Rs 2.00 lac paid to the Lender Company during the assessment which has direct nexus on the loan in dispute. As such the AO has taken a contrary stand. Thus, the loan amount of cannot be made subject to addition under the provisions of section 68 of the Act in view of the judgment of Hon'ble Jurisdictional High Court in the case of PCIT vs. Ojas Tarmake (P) Ltd. reported in 156 taxmann.com 375 where it was held as under:

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What is evident is that the Tribunal found on facts that the amount of loan received by the assessee was returned to the loan party during the year itself and all transactions were carried out through banking channel. The Tribunal on the decision of Dy. CIT. Rohini Builders [2003] 127 Taxman 523/[2002] 256ITR360 (Guj.), held in favour of the assessee. [Para 3]

In view of the above, it is stated that the loan taken from Pawanshiv Dealmark Pvt Ltd was genuine business loan and not accommodation entry. Also the identity of lender, capacity of lender and genuineness of the transaction is proved. It is prayed that the addition of Rs 50,00,116.00 u/s 68 may kindly be deleted."

5.1. However, Ld. CIT(A) confirmed the addition at 8% being the commission element in the bogus transaction. Ld. CIT(A) failed to consider the confirmation of interest payment and repayment of loan. It is undisputed fact that the loan was paid within 4 months in the same financial year. Thus, the initial onus cast upon the assessee was fully discharged, whereas the Revenue could not controvert the above repayment of loan with interest.

5.2. The Hon’ble Gujarat High Court in the case of PCIT vs. Ojas Tarmake (P.) Ltd reported in [2023] 156 taxmann.com 75 (Gujarat) held as follows:-

Section 68 of the Income-tax Act, 1961 Cash credits (Unsecured loan) - Assessment year 2013-14 - During assessment proceedings it was noted that assessee had shown particulars of unsecured loan received during relevant assessment year - Assessing Officer issued letters under section 133(6) on creditors of unsecured loans - Thereafter, Assessing Officer made additions with respect to unsecured loan on ground that assessee failed to discharge onus of liability as laid down under section 68 - On appeal, Commissioner (Appeals) upheld additions on ground that assessee failed to produce any of creditors before Assessing Officer - Whether since Tribunal found on facts that amount of loan received by assessee was returned to loan party during year itself and all transactions were carried out through banking channels, no error of law was

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committed by Tribunal by deleting addition made under section 68 - Held, yes [Paras 3 and 4] [In favour of assessee]

5.3. Jurisdictional Rajasthan High Court in the case of PCIT vs. Saileela Synthetics (P.) Ltd. reported in [2024] 161 taxmann.com 713 (Rajasthan) in the context of share application money, deleted the addition made u/s 68 of the Act by observing as follows:-

Section 68 of the Income-tax Act, 1961 - Cash credit (Share application money) - Assessment year 2015-16 Assessee-company was engaged in manufacturing and trading of synthetic fabric - During relevant year, assessee raised its share capital by allotment of equity shares to 11 companies and received certain sum on allotment of shares - Assessing Officer treated amount received by assessee on allotment of shares as unexplained cash credit under section 68- It was noted that assessee had furnished all relevant and requisite documents to prove identity and creditworthiness of companies to whom shares were allotted - Assessing Officer passed assessment order only on basis of suspicion and doubt - Whether, on facts, impugned addition made by Assessing Officer deserved to be deleted Held, yes [Para 7.2] [In favour of assessee]

6.3. Respectfully following the above judicial precedents and the Revenue could not place on record any other relevant material to sustain the addition made u/s 68 of the Act. Therefore we delete the addition made by the lower authorities.

6.

In the result, the appeal filed by the assessee is hereby allowed for statistical purposes.

Order pronounced in the open court on 31-08-2026

Sd/- Sd/- (PRAKASH) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated 31/08/2026 Dhananjay K., Sr. PS

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आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT 6. Guard file. By order/आदेश से, सहायक पंजीकार आयकर अपील�य अ�धकरण, जयपुर

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