ACIT 321 MUMBAI, MUMBAI vs. PARSI DAIRY FARM, MUMBAI

आयकरअपीलीयअिधकरण�ायपीठमुंबईम�। IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM & SHRI ARUN KHODPIA, AM I.T.A. No.5445/Mum/2025 (Assessment Year: 2022-23) ACIT 3 2 1, Mumbai Parsi Dairy Farm Room No.608, Aayakar Bhavan, 261-63 Engineer Building, Princess Vs. Churchgate, Mumbai-400020 Street, Marine Lines, Mumbai-400002 PAN: AAAFP5984E Revenue- अपीलाथ� / Appellant Assessee-��थ�/ Respondent :

Assesseeby : Shri Harsh Kapadia (Virtually Appeared) & Shri Nitin Khinchi (Physically Appeared) : Shri Virabhadra S. Mahajan Revenueby (SR. DR.) Date of Hearing : 24.03.2026 Date of Pronouncement : 22.06.2026

O R D E R Per Arun Khodpia, AM: The captioned appeal of the Revenue arises against the order of the Commissioner of Income Tax Appeals, National Faceless Appeal Centre (NFAC), Delhi [in short, “the Ld. CIT(A)”], dated 20.06.2025 for the Assessment Year (AY) 2022-23, resulted from the assessment order under section 143(3) of the Income Tax Act, 1961 [in short, “the Act”] dated

25.03.2022, passed by the Assessment Unit, Income Tax Department [in short,“the Ld.AO”].The grounds of appeal raised by the Revenue are as under:

“i) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) is justified in deleting the disallowance/ addition of unsecured loans of Rs. 29, 15,00,000/-as unexplained credit under section 68 r.w.s. 115BBE of the Income tax Act, 1961 without appreciating the facts that the lender parties have received credits just prior to advancing the loan to the assessee and thus have no creditworthiness. (ii) The Ld.CIT(A) ought to have confirmed the addition made by the AO on the grounds that as per the bank statement of the lenders they have no creditworthiness and also business relationship between the assessee and lenders are not established. (iii) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) is justified in deleting the disallowance without appreciating the facts that the assessee failed to prove whether liquid assets were available with the lenders and if there was liquidity why the credits from the other parties were received by the lenders prior to the transfer of the amounts to the assessee putting genuineness of the transactions in question. (iv) The Ld.CIT(A) ought to have appreciated the facts that the assessee did not file any new evidence during the appellate proceedings and that the documents forwarded as additional evidence were already filed before the AO during the course of assessment proceedings. (v) The Ld.CIT(A) ought to have appreciated the facts that the remand report was sent without proper verification of the facts considering the limited time provided to the AO. (vi) Without prejudice to the above, the Ld.CIT(A) ought to have set aside the issue to the AO for thorough verification of the creditworthiness of the lenders and genuineness of the transactions. (vii) Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) is justified in deleting the disallowance/ addition of sundry balances of previous year(s) w/off of Rs. 58, 17,371/-as per the provisions of the Income Tax Act, 1961. (viii) The Appellant craves leave to add, amend and/or vary the grounds of appeal before or during course of hearing.”

under Faceless Assessment Scheme 2019/20 by CASS. After deliberations, the assessment was completed on 25.03.2022 making following adjustment in the return of the assessee:

Returned Income Rs. 54,81,73,430/-

Add: Disallowance of unsecured loans u/s.68 Rs.29,15,00,000/-

Add: Disallowance u/s. 37 Rs.5,32,480/-

Add: Disallowance of sundry balances w/off Rs.58,17,371/-

Assessed Income Rs.84,60,23,281/-

The facts of the case are that the appellant had shown a total unsecured loan of Rs. 108,57,36,615/- during the F. Y. 2021-22 pertaining to A. Y 2022-23. The AO made an addition of Rs. 29,15,00,000/- on account of unexplained cash credit u/s.68 recording citing the following reasons:

"On perusal of the assessee's reply it is found that the assessee has furnished the details in respect of unsecured loans and the same has been tabulated as under:-

Sr. Name of the Party Openi Loan Re- Closi ng received payme ng No. Balanc during the nt Balan e year ce

1 Vandana 0 6,75,00,000 0 6,75,00,000 Berjis Desai

2 Shivramakrishna 0 1,50,00,000 0 1,50,00,000 nIyer

3 Nirmal Bang 0 7,25,00,000 0 7,29,16,096 Fin Serve Pvt. Ltd.

4 MindsetSecurities 0 26,65,00,000 0 26,65,00,000 Pvt. Ltd.

5 KishoreMisrilalBa 0 3,37,50,000 0 3,37,50,000 ng

6 BerjisDesaiCapital 0 22,40,00,000 0 22,40,00,000 Advisor LLP

7 DilipMishrilalBang 0 3,37,50,000 0 3,37,50,000 Total 71,30,00,000 0 71,34,16,096

"It is verified from the above table, Smt. Vandana Berjis Desai & M/s. Berjis Desai Capital Advisor LLP does not have the credit worthiness to give the unsecured loans to the assessee. Hence, the unsecured loans received from the above said loan-creditors to the tune of Rs. 29,15,00,000/- (Rs. 6,75,00,000/- Rs. 22,40,00,000/-) is disallowed as unexplained credit section 68 r.w.s. 115BBE of the Income Tax Act, 1961 and added Rs. 29,15,00,000/- to the total income of the assessee.

7.2 Decision on first issue: 4 I have considered the submissions of the appellant, the contentions of the AO in the assessment order and perused the materials available on record. The facts of the case are that the appellant had shown total unsecured loan of Rs.1,08,57,36,615/- during the FY 2021-22 pertaining to AY 2022-23. The AO issued a show cause notice dated 07.03.2024 stating that in absence of explanations and supporting documentary evidences for the unsecured loan to the tune of Rs. 71,30,00,000/-, genuineness of the appellant's claim is not verifiable and proposed to add the amount of Rs. 71,30,00,000/- as unexplained cash credit under section 68 of the Act r.w.s 115BBE of the Act. Later, the AO held that Smt. Vandana Berjis and M/s. Berjis Desai Advisor does not have creditworthiness to give the unsecured loan to the appellant and added an amount of Rs. 29,15,00,000/- (i.e loan received from Smt Vandana Berjis of Rs. 6,75,00,000/- and loan received from M/s. Berjis Desai Capital Advisor LLP of Rs. 22,40,00,000/-) as unexplained credit under section 68 r.w.s section 115BBE of the Act. The material available on record, submissions made by the appellant during the assessment proceedings and appellate proceedings clearly reveals that AO has failed to bring any adverse material on record. On perusal of the submissions made by the appellant, it is found that both the loan creditors are regularly assessed to income tax. The copies of returns of income filed by them were also filed by the appellant. PAN of both the lenders were provided; these loans were taken through banking channel. Thus, all the ingredients of genuine loans viz (i) identity (ii) genuineness and (iii) creditworthiness were established and, therefore, initial onus casted upon by the statue on the appellant was duly discharged by the appellant. On perusal of details filed by the appellant, it is found that Smt. Vandana Berjis Desai has shown her total income of more than Rs. 1 Crore for the last three years, which is as under: 1. Y. Returned Income (in Rs.) 2020-21 1,13,98,010/- 2021-22 1,12,78,170/- 2022-23 1,25,29,700/-

The appellant has filed following details in case of lender Smt. Vandana Berjis Desal 1. Loan confirmation, 2. Bank Statement of the lender, 3. Acknowledgement of ITRs for the A. Y. 2020-21, 2021-22 and 2022-23 In the circumstances, the identity, creditworthiness and genuineness of the transaction of the creditor stood proved as the appellant had discharged the onus of explaining the

transactions. The AO has not brought anything adverse on record by way of an independent enquiry. Hence, addition made by the AO cannot be held to be correct In case of other loan creditor M/s Berjis Desai Capital Advisor LLP, the returned income was (-) 7,68,028/- for the A Y 2022-23. It is observed that the AO, while coming to his conclusion, formed an opinion that both these loan creditors did not have creditworthiness. He did this without assigning any reason or bringing any evidence on record. As the assessment order was passed without providing opportunity to the appellant to submit response and other details, the appellant made an application for admission of additional evidence as follows: Additional Evidence as per Rule 46A of the Income Tax Act, 1961 The AO in his order used three years income criterion of the loan lender to prove the creditworthiness of the loan lender. However, the AO has failed to understand that the income is not the only source to lend the amount, the loanlender can use its investment from which income is being generated to provide loan to the lender. The AO didn't provided the assessee opportunity to explain the above and also didn't provided us with his calculation of using such criterion to determine the creditworthiness of the loan lender or the partners of the loan lender. Hence as additional evidence the assessee would like to submit the additional evidences of the loan lender or the source of the loan lender from which the loan has been advanced at the time of hearing. Hence, we are submitting you the additional evidence taking the stand of Rule 46A(1)(d) wherein it is stated that: - "46A. (1) The appellant shall not be entitled to produce before the 94[Deputy Commissioner (Appeals)] 95[or, as the case may be, the Commissioner (Appeals)), any evidence, whether oral or documentary, other than the evidence namely:-produced by him during the course of proceedings before the 96[Assessing Officer]. except the following circumstances, in (d) where the 97[Assessing Officer] has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal" Accordingly, a remand report was called for the AO in the following manner: "The assessee has contested the additions made in the Assessment Order u/s 143(3) dated 25/03/2024 for the A.Y, 2022-23. It appears that the following additions were made: 1. Unsecured loans u/s 68Rs. 29,15,00,000/- 2. Disallowance u/s 37Rs. 5,32,480/- 3. Disallowance of sundry balance written offRs. 58,17,371/-

The appellant wishes to adduce additional evidence in terms of Rule 46A (1)(d) of the IT Rules. The application for admission of additional evidence along with the annexures attached thereto are forwarded herewith for your perusal and necessary feedback. You are requested to examine the details filed at the appellate stage and examine the claim of the appellant made against the Assessment Order by way of Grounds of Appeal. Copy of submission of the assessee and Grounds ofAppeal are also annexed herewith for your reference. The requisition is made in terms of section 250(4) of the IT Act." The contents of the remand report has been mentioned in the earlier section (6) of this appellate order, where, although the AO objected to admission of additional evidence, did not find anything adverse in so far as the identity, genuineness of transaction and creditworthiness of the related parties in the matter of fresh unsecured loans are concerned. In the case of loan from M/s. Berjis Desai Capital Advisor LLP, the appellant had made following submissions 1. Loan confirmation, 2. Bank Statement of the lender, 3. Acknowledgment of ITR for A. Υ. 2022-23; 4. Profit & Loss account and Balance Sheet as at 31-3-2022 showing the loan given to the Appellant. appellant On perusal of submissions of It is found that M/s. Berjis Desai Capital Advisor LLP was incorporated on 06.05.2019, wherein there were two partners i.e., Mr. Berjis Minoo Desai and Mr. Shivaramakrishanan S. lyer. The appellant had filed balance sheet as on 31.03.2022 of M/s Berjis Desai Capital Advisor LLP, which shows source of loan advanced to the appellant. It is seen that the unsecured loan was advanced to the appellant by the loan creditor out of loans received by it from its partners. The appellant has made submission as regards capital of partners and retums of income filed by them as 'additional evidence', which the appellant could not submit during the course of assessment proceedings, and opportunity was not granted to the appellant to submit the same. The details filed are under: S. No. Partner Amount received (in Rs.) 1 Berjis Minoo Desai Rs. 14,39,74,183/- 2 Shivaramakrishnan S. lyer Rs. 8,68,07,993/- Total Rs. 23,07,82,176/-

Further, details of total income shown by these partners and their capital for the P Yrs. relevant to A Yrs. 2020-21, 2021-22 and 2022-23 were filed by the appellant as follows: i. Berjis Minoo Desai 1. Y. Total Income Capital (in Rs.) 2020-21 2,98,46,420/- 43,29,84,224 2021-22 6,25,93,640/- 51,59,71,069/- 2022-23 22,20,77,020/- 85,28,39,099/-

ii. Shivaramakrishnan S. lyer 1. Y. Total Income Capital (in Rs.) 2020-21 1,81,69,840 25,02,02,461/- 2021-22 1,91,78,760/- 26,13,29,357/- 2022-23 4,95,05,380/- 33,69,01,775/-

The appellant has relied upon on many judgements in the submissions made during the appellate proceedings whereCourts have held that once theassessee discharged onus cast upon him and has provided substantial evidence to establish the identity, genuineness, and creditworthiness of the loan creditors, burden shifts to the revenue. However, in the case of the appellant, the AO could not prove or bring any material on record to corroborate lack of credit worthiness of the lenders and his conclusions were largely based on assumptions and without substantial evidence contradicting the appellant'sclaims. Jurisdictional High Court in the case Gaurav Triyugi Singh vs ITO in 423 ITR 531 (Bom) held as under: "In view of discharge of burden by the assessee, burden shifted to the revenue; but revenue could not prove or bring any material to impeach the source of the credit. Though Mr. Walve, learned standing counsel, has pointed out that the creditor had no regular source of income to justify the advancement of the credit to the assessee, we are of the view that the assessee had discharged the onus which was on him to explain the three requirements, as noted above. It was not required for the assessee to explain the sources of the source. In other words, he was not required to explain the sources of the money provided by the creditor Smt. Savitri Thakur i.e. Shri Rajendra Bahadur Singh and Smt. Sarojini Thakur." In the case of appellant, partners of M/s Berjis Desai Capital Advisor LLP are possessing substantial means to invest. Though the lender firm has a shown loss in the return of income filed by it but the LLP havereceived contributionsfrom partners and on perusal of capitals of partners and income tax returns filed by them, it is observed that the creditworthiness of partners cannot be doubted upon. I may refer to certain case laws where similar issues regarding receipt of loans were decided by various courts.

CIT v. Orissa Corpn (P) Ltd [1986] 159 ITR 78/25 Taxman 80F (SC): In this case assessee gave the names and addresses of the creditors. It was in the knowledge of the revenue that the creditors were income-tax assessees. The revenue apart from issuing notices under section 131 did not pursue the matter further. It did not examine the source of income of the alleged creditors to find Income of the alleged out whether they were creditworthy. The Hon'ble Jurisdictional High Court in the case of CIT vs. Haresh D. Mehta [2017] 86 taxmann.com 22 (Bombay) held that where assessee proved loan transactions from various parties by producing details like copy of PAN card, copy of return of income, balance sheet and copy of bank accounts of creditors, Tribunal was justified in deleting addition made by AO under section 68 in respect of said transactions. The head note is reproduced as under: "Section 68 of the Income-tax Act, 1961- Cash credits (Burden of proof) Assessment year 2007-08 During relevant year, assessee obtained unsecured loans from various parties Assessing Officer took a view that assessee had not proved capacity or genuineness of parties to undertake such huge loan transactions He thus added said amount to assessee's income under section 68- Tribunal found that assessee had produced details like copy of PAN card, copy of return of income, balance sheet and copy of bank accounts beforeAssessing Officer - Tribunal thus opined that once initial burden was discharged, Assessing Officer had then to find out that despite production of record in relation to those parties, why version of assessee could not be accepted In view of failure of Assessing Officer to carry out said exercise, Tribunal set aside addition made by him Whether since finding recorded by Tribunal was based on material available on record, same did not require any interference. Held, yes [Paras 15 and 16] [In favour of assessee In the case of CIT v. Vrindavan Farms (P) Ltd., 2015(11) TMI 279, by a decision dated 12.08.2015, the Hon'ble High court has held as under: "3. The ITAT has in the impugned order noticed that in the present case the Revenue has not doubted the identity of the share applicant. The sole basis for the Revenue to doubt their creditworthiness was the low income as reflected in their Income Tax Returns. The entire details of the share applicants were made available to the AO by the assessee. This included their PAN numbers, confirmations, their bank statements, their balance sheets and profit and loss accounts and the certificate of incorporation etc. It was observed by the ITAT that the AO had not undertaken any investigation of the veracity of the above documents submitted to him. It has been rightly commented by the ITAT that without doubting the documents, the AO completed the assessment only on the presumption that low return of income was sufficient to doubt the creditworthiness of the share holders." Several other judgements may be referred here: The Principal Commissioner of Income-tax-4 vs VaishnodeviRefoils&Solvex[2018] 89 taxmann.com 80 (Gujarat)/[2018] 253 Taxman 135 (Gujarat)[28-11-2017] Section 68 of the Income-tax Act, 1961 Cash credit (Firm/partner, in case of) - Assessment year 2010-11- For relevant year, Assessing Officer made addition to income of assessee- firm under section 68 on account of capital introduction by one partner of firm Assessing Officer, was of view that credit worthiness of partner who introduced capital 9

had not been proved - In appellate proceedings, Tribunal found that amount received by assessee-firm had been duly reflected in books of account maintained by concerned partner - Tribunal thus deleted addition made by Assessing Officer - Whether on facts, when assessee had furnished details with regard to source of capital introduced in firm and concerned partner had also confirmed such contribution, it could be concluded that assessee had duly discharged onus cast upon it -Held, yes Whether, therefore, if Assessing Officer was not convinced about creditworthiness of partner who had made capital contribution, inquiry had to be made at end of partner and not against firm Held, yes Whether in view ofaforesaid, impugned order passed by Tribunal deleting addition in hands of assessee-firm, did not require any interference Held, yes [Paras 8 and 9] [In favour of assessee.] Income-tax Officer vs. Mega Collections (P.) Ltd. [2023] 151 taxmann.com 403 (Surat- Trib.)/[2023] 201 ITD 404 (Surat-Trib.) [17-04-2023] Where assessee-company by submitting PAN number, address, income tax returns, audited financial statements of creditors and bank statement of share applicants had discharged onus to prove identity, creditworthiness and genuineness of its loan transactions with various companies and source of source had also been proved by assessee, impugned loan transactions could not be treated as unexplained cash credit under section 68. Principal Commissioner of Income-tax (Central) vs. Dharmesh Padamshibhai Patel [2023] 156 taxmann.com 491 (Gujarat) [28-08-2023] Where assessee received loans from several parties and had furnished bank accounts details of all lenders wherein loans were duly reflected, creditors were assessed to tax and their confirmations were filed, since creditworthiness of lenders and genuineness of loan transaction were already proved, an opportunity was rightly allowed by Tribunal to assessee to prove identity of lenders. Hon'ble High Court in the case of PCIT vs M/s Goodview Trading Pvt. Ltd., reported in 2016 (12) TMI 617 Delhi High Court, vide decision dated 21.11.2016, observed as under "It is quite evident vident from the CIT(A)'s reasoning in paragraph 4.3, that the materials clearly pointed to the share applicants' possessing substantial means to invest in the assessee's company. The AO seized certain material to say that minimal or insubstantial amounts was paid as tax by such share applicants and did not carry out a deeper analysis or rather chose to ignore it. In these circumstances, the inferences drawn by the CIT(A) are not only factual but facially accurate." In view of the discussion above, it is abundantly clear that the AO has failed to bring any cogent grounds and in absence of the same, no addition Section 68 of the Act can be made. Accordingly, addition of Rs. 29,15,00,000/- made by the AO u/s 68 of the Act is deleted. This is also in view of the fact that the AO had opportunity to examine the entire records/evidences afresh at the remand stage and in his remand report, no adverse view was expressed. The appeal of the appellant in this issue is allowed.”

4. Regarding second issue pertaining to disallowance of expense u/s 37 for Rs.5,32,480/-, the assessee did not press the same before the Ld. CIT(A). Therefore, the same has been dismissed as not pressed.

details and supporting evidence and the liability of unsecured loans from others as claimed in the balance-sheet details in the ITR. Even during the remand proceedings also, the assessee submitted the same information which was already produced before the Ld. AO. In absence of explanations and supporting documentary evidence for unsecured loan availed by the assessee to the tune of Rs.29.15 crore, the genuineness of transaction could not be verified. Hence, the Ld. AO rightly treated the same as unexplained cash credit u/s 68 r.w.s 115BBE of the Act and added to the total income of the assessee.

“4.1.2 During the remand proceedings, the assessee submitted loan confirmation, bank statement of the lender and acknowledgment of the ITR for the relevant assessment year. However, creditworthiness of the parties could not be established on the following reasons:- “(a) The assessee has submitted the acknowledgement of ITR in the case of Vandana Berjis Desai. It is evident from the returns that the assessee has shown return income of Rs.1,00,00,000/- in each year and claimed that the creditworthiness of the assessee cannot be doubted. However, it is seen from the bank statement of Vandana Berjis Desai that she has received credit of Rs.4,75,00,000/- on 4th September, 2021 and transferred an amount of Rs.6,75,00,000/- on 8th September, 2021 to the assessee. Further, the assessee has not submitted the capital account of the lender. Therefore, the genuineness of the transactions is not proved. In view of these facts, the creditworthiness of Vandana Berjis Desai can not be proved. (b) In the case of Berjis Desai Capital Advisor LLP, it has credited an amount of Rs.22,40,00,000/- to the assessee. From the submission made by the assessee, it is seen that the LLP was incorporated on 06/05/2019 and has filed return of income starting 12

from A.Y. 2022-23 showing a loss of Rs.7,68,028/-. It is also seen that the LLP has capital of Rs.3,00,000/- as on 31/03/2022. Further, it is also evident from the bank statement of the lender for the relevant period that the LLP has received Rs.2 Crore on 13.12.2021, Rs.3.75 crore on 13.12.2021 another Rs.50 lacs on 13.12.2021 and Rs.12.25 Crore on 14.12.2021 and thereafter the LLP has immediately transferred to the funds of Rs.18.40 Cr. to the assessee on 14.12.2021. Therefore, the genuineness of the transactions is not proved. Hence, it is proved that Berjis Desai Capital Advisor LLP has no creditworthiness to advanced such huge amount to the assessee.”

appeal of assessee, resulting thereby the deletion of addition/disallowance made by the Ld. AO. Therefore, the order of Ld. CIT(A) deserves to be set aside to the extent the reliefs granted to the assessee and the addition/disallowance made by the Ld. AO deserves to be restored.

7. Without prejudice to the above, even if such short recoveries are viewed as commercial deductions rather than traditional bad debts, they are allowable as ordinary business losses under section 28 of the Act, as they spring directly from the carrying on of the business. 8. During the course of the hearing before the Hon'ble Tribunal on 24th March 2026, the details and party wise break up of the net amount of 258,17,371 was demonstrated to the Hon'ble Bench. Further, leave was sought by the counsel for the Respondent Assessee to furnish further evidence including age of the outstanding balances so written off by the Assessee. In this connection, enclosed herewith and marked as Exhibit-A are copies of ledger accounts of a few major corporate clients (e.g., MS Shivam Food Andheri, Nature's Basket Ltd., Reliance Retail Ltd., Haiko Super Market, and Supermarket Grocery Supplies Pvt. Ltd.), whose aggregate amount of write off is ₹27,77,418/-, which constitutes approximately 48% of the total net amount written off. These accounts pertain to preceding previous years during which the respective sales were made and duly offered to tax. The ledgers clearly show the parties as the Respondent Assessee's debtors and reflect the outstanding balances, establishing that these balances were long-standing and remained unpaid. In the year under consideration, upon ascertaining that such amounts had become irrecoverable, the Respondent Assessce wrote off the said balances in its books of account. The enclosed ledger extracts thus substantiate the origin of the balances, their existence as genuine receivables, and their eventual write-off on account of commercial non-recoverability. 9. In view of the above facts and the settled legal position, it is submitted that the sundry balances written off are genuine business losses and/or allowable bad debts. The CIT(A) has rightly appreciated the facts and deleted the addition. 10. The Respondent Assessee humbly prays that the order of the CIT(A) be upheld and the appeal filed by the Department be dismissed.”

first appellate stage, the assessee had furnished additional evidences such as ITR, ledger confirmations, balance sheet, and bank statement of the lender. All these documents were referred to Ld. AO for a remand report, wherein the Assessing Officer had objected to admission of additional evidence but did not comment anything adverse insofar as the identity, genuineness of transaction and creditworthiness of the related parties are concerned.

lender, therefore, the genuineness of transaction cannot be taken as proved. Regarding the second lender M/s. Berjis Desai Capital Advisor LLP, Ld. DR submitted that the LLP has shown a loss of Rs.7,68,028/- for the AY 2022-23, also the capital of Rs. 3 lakh as on 31st March, 2022. From the bank statement of the lender, it has received 2 crore on 13.12.2021, 3.75 crore on 13.12.2021 and another 15 lakh on 13.12.2021 and Rs.12.25 crore on 14.12.2021 and thereafter the LLP has immediately transferred such funds in an aggregate of Rs.18.40 crore to the assessee on 14.12.2021. Therefore, the genuineness of transaction is not proved. Hence, the creditworthiness of M/s. Berjis Desai Capital Advisor LLP was doubtful. It was the contention that in absence of explanation and supporting documentary evidence for the unsecured loan provided to the assessee by the above lenders, the genuineness of transaction could not be verified, hence the order of Ld. CIT(A) needs to be reversed on this aspect.

taken from banking channel. Thus, all the ingredients of genuineness of loans viz., the identity, genuineness and creditworthiness were established and therefore, initial onus cast upon by the statute on the assessee was duly discharged by the assessee. He further perused the financials of both the lenders, according to which Smt. Vandana Berjis Desai has shown return of income of more than 1 crore in last three years. Ld. CIT(A) observed that the Ld. AO has not brought anything adverse on the record by way of independent enquiry.Hence, the addition made by Ld. AO cannot be held to be correct.

to assessee to submit the same. Ld. CIT(A) observed that the Ld. AO could not prove or bring any material on record to controvertthe creditworthiness of lenders and his conclusions were largely based on assumptions and without substantial evidence contradicting the assessee’s claim. Finally, the Ld. CIT(A) directed to delete the addition of 29.15 crore made u/s 68 based on analysis of financials of the lenders and the addition evidence furnished by the assessee at first appellate stage which were duly referred to Ld. AO and the remand report was also furnished with no adverse comments.

not only wrote off irrecoverable debit balances but also wrote back certain credit balances. The adjustments were made as actual write off in the books of accounts and not a mere provision. The assessee has also furnished various details of return of balances along with the ledger accounts of such balances. On this issue, the Ld. AO had made the disallowance, however, the Ld. CIT(A) had allowedthis ground of assessee and directed the Ld. AO to delete the entire addition of Rs.58,17,371/-. The decision of Ld. CIT(A) is challenged by the revenue before us with the argument that during the course of assessment proceedings, the assessee has not furnished any documentary evidence other than party-wise details. Hence, in absence of explanation and supporting documents, it is not ascertained that written off of sundry balances were from previous year or from years when such income was offered for income for tax purpose and, therefore, the Ld. AO has rightly disallowed the amount of balances written off.

the Ld. AO with all the requisite details so as to determine this issue and take it forward to a logical end. In result, Ground of Appeal No.(vii) of the Revenue is partly allowed for statistical purposes.

Sd/- Sd/- (ARUN KHODPIA) (AMIT SHUKLA) JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai, Dated : 22-06-2026. Ankit K., Sr. PS

Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. DR, ITAT, Mumbai 4. Guard File 5. CIT

BY ORDER,

(Dy./Asstt. Registrar) ITAT, Mumbai