M/S SAHAJ DEVCON PRIVATE LIMITED,AHEMDABAD vs. INCOME TAX OFFICER-4(1)(1), AHEMDABAD

PDF · subscribers
ITA 1544/AHD/2025Status: DisposedITAT Ahmedabad13 May 2026AY 2013-146 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the assessee failed to establish the genuineness and creditworthiness of the loan transactions. However, considering the submission of repayment of a portion of the loan, the matter was set aside to the AO for verification.

What were the facts?

The assessee, a builder, declared a loss for AY 2013-14. The Assessing Officer (AO) treated unsecured loans of Rs. 5.05 crores as bogus and added it to the assessee's income, also disallowing related interest expenses.

What were the issues?

Whether the assessee established the identity, creditworthiness, and genuineness of the unsecured loans received.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD

Before: SHRI TR SETHIL KUMAR & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri C. P. Rawka, AR
For Respondent: Shri Rameshwar P Meena, SR-DR
Hearing: 15.04.2026Pronounced: 13.05.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal is filed by the assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 14.02.2025 for the Assessment Year (A.Y.) 2013-14 in the proceeding u/s 143(3) of the Income Tax Act.

2.

There was a delay of 97 days in filing of this appeal. The assessee has filed a condonation application explaining the reason for delay. It has been explained that the order of the Ld. CIT(A) was received on the e- mail ID of the previous counsel, which was not communicated to the

ITA No.1544/Ahd/2025 M/s Sahaj Devcon Pvt ltd. Vs ITO, AY- 2013-14 2 assessee in time. As a result, there was delay of 97 days in filing of this appeal. Considering the explanation of the assessee, the delay in filing of this appeal is condoned.

3.

The brief facts of the case are that the assessee had filed its return of income for A.Y. 2013-14 on 30.09.2013 declaring loss of Rs.4,67,099/- . The case was selected for scrutiny by issue of notice u/s 143(2) of the Act dated 03/09/2014. The assessee is a builder and no business activity was carried out during the year. In the course of assessment, the AO had inquired about unsecured loans of Rs. 4.95 crores taken from Grow Fast Distributors Pvt. Ltd. and of Rs. 10,00,000/- from Sodani Hospital & Diagnostics Pvt. Ltd.. As the AO was not satisfied with the genuineness and credit-worthiness of this loan transaction, the total loan of Rs.5.05 crores taken from the two parties was held as bogus and added to income. Further, the interest expense of Rs.86,137/- pertaining to these two loans was also disallowed. The assessment was completed u/s. 143(3) on 14.03.2016 at total income of Rs.5,01,19,040/-.

4.

Aggrieved with the order of the AO, the assessee had filed an appeal before the first appellate authority, which was decided by the learned CIT(A) vide the impugned order and the appeal of the assessee was dismissed. Th

5.

Now the assessee is in second appeal before us. The following grounds have been taken in this appeal:

ITA No.1544/Ahd/2025 M/s Sahaj Devcon Pvt ltd. Vs ITO, AY- 2013-14 3 1. The CIT(A) erred in law and facts of the case and confirmed the addition of Rs. 5,05,00,000/- made by Assessing Officer under section 68 of the Income Tax Act, 1961. 2. That the appellant craves to leave, add, alter or amend any of the ground at or before hearing. 6. Shri C. P. Rawka, the Ld. AR of the assessee submitted that the assessee had duly established the identity, genuineness and credit worthiness of the two loans. He explained that both the loans were obtained through banking channels and out of loan of Rs. 4.95 crores taken from Grow Fast Distributors Pvt. Ltd an amount of Rs. 1,68,50,000/- was repaid in the subsequent years. Therefore, there was no basis for the AO to treat the loan transaction as bogus. The Ld. AR submitted that the AO did not make any inquiry with the loan creditors to examine their credit worthiness as well as the genuineness of transactions and that the addition was based on mere suspicion.

7.

Per Contra Shri Rameshwar P Meena, the Ld. SR-DR, submitted that the assessee had not furnished confirmation of the loan creditors but only given the ledger account of the creditors as appearing in the books of accounts of the assessee, which does not establish the credit worthiness of the transactions. Further, no evidence for payment of interest on these loans and deduction of TDS thereon was brought on record. The Ld. SR-DR further submitted that the assessee had only filed ITR of Grow Fast Distributors Pvt. Ltd. from which it was noted that the said creditor had disclosed income of Rs. 65,566/- only. Considering the income disclosed by the said creditor, the AO had rightly held that the creditor did not have the capacity to advance such huge loan. The Ld. SR- DR, therefore, strongly supported the order of the lower authorities.

ITA No.1544/Ahd/2025 M/s Sahaj Devcon Pvt ltd. Vs ITO, AY- 2013-14 4 8. We have considered the rival submissions. The limited issue to examine in this appeal is whether the identity of the creditors, their credit- worthiness and genuineness of the loan transactions was established. Merely because the loans were obtained through banking channels, it does not establish the credit-worthiness of the creditor nor the transaction can be held as genuine for this reason. The assessee had brought on record Income Tax Return (ITR) of Grow Fast Distributors Pvt. Ltd. for A.Y. 2013-14, from which it is noticed that the total revenue of the said creditor was Rs. 60,53,488/- only and the total income disclosed as per ITR was mere Rs. 64,546/-. This financial doesn’t inspire confidence to accept the creditworthiness of this party. The assessee has also filed a copy of confirmation account of Grow Fast Distributors Pvt. Ltd., which is found to be signed by one Shri Bhupendra Singh Chouhan. Neither the PAN No. & seal of the company Grow Fast Distributors Pvt. Ltd. is appearing in the confirmation nor the authority of the person signing the confirmation, is mentioned therein. According to the assessee, a sum of Rs. 1,68,50,000/-was returned to Grow Fast Distributors Pvt. Ltd. during the year Financial Year 2015-16. However, the bank statement for this period has not been has not been brought on record so that this fact can be verified. The assessee has also not given any evidence for payment of interest to Grow Fast Distributors Pvt. Ltd. and deduction of TDS thereon. The primary onus to establish the credit-worthiness and genuineness of transactions was on the assessee, which is not found discharged in the present case. The assessee has also not explained as to why such huge amount of loan was taken during the year when there was no business activity.

ITA No.1544/Ahd/2025 M/s Sahaj Devcon Pvt ltd. Vs ITO, AY- 2013-14 5 9. Regarding the loan of Rs.10,00,000/- taken from Sodani Diagnostics, the assessee has filed a confirmation in the paper-book. This loan was received on 13.07.2012. However, the bank statement of assessee for this period has not been brought on record to establish the genuineness of transaction. A mere filing of confirmation or copy of return does not establish the genuineness and credit worthiness of the transactions. The assessee has not stated anything about the repayment of this loan amount even after expiry of more than 12 years. Further, no evidence for payment of interest & deduction of TDS thereon has been brought on record.

10.

In view of the facts as discussed above, we are not convinced with the explanation of the assessee regarding genuineness and credit worthiness of loan transactions. However, in view of the submission that the assessee had repaid loan of Rs.1,68,50,000/- to Grow Fast Distributors Pvt. Ltd. during the financial year 2015-16, we deem it proper to set aside the matter to the file of Jurisdictional AO with a direction to verify this fact. The AO may verify the factum of repayment of both the loans, if any, and relief may be allowed to the extent the loan amounts was repaid by the assessee to the two creditors.

11.

In the result, the appeal of the assessee is allowed for statistical purpose.

Order pronounced in the Court on 13/05/2026 at Ahmedabad.

Sd/- Sd/- (TR SETHIL KUMAR) (NARENDRA PRASAD SINHA) Judicial Member Accountant Member Dated – 13th May, 2026

ITA No.1544/Ahd/2025 M/s Sahaj Devcon Pvt ltd. Vs ITO, AY- 2013-14 6

(True Copy) Neelesh, Sr. PS आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : अ�ेिषत 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A) 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण / DR, ITAT, 6. गाड� फाईल /Guard file. आदेशानुसार/BY ORDER, आदेशानुसार आदेशानुसार आदेशानुसार पंजीकार (Dy./Asstt.Registrar) उप उप/सहायक उप उप सहायक सहायक पंजीकार सहायक पंजीकार पंजीकार आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, अहमदाबाद अिधकरण अहमदाबाद अहमदाबाद / ITAT, Ahmedabad अहमदाबाद

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →