DCIT, CENTRAL CIRCLE-1, RAIPUR, NAWA RAIPUR vs. SHREE PARIYOJNA NIRMAAN PVT. LTD., RAIGARH

आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM:

The present appeal preferred by the Revenue emanates from the order of the Ld.CIT(Appeals)-3, Raipur dated 06.11.2025 for the assessment year 2018-19 as per the grounds of appeal on record.

Bundle No.2 (Page No. 1 to 159) F.Y. 2017-18 Narration as per seized material Amount CASH RECV FROM BABALU (SRBVB) Rs. 45,00,000 ASHOK FUEL CASH Rs. 20,00,000 PAID TO GR FUEL CASH Rs. 3,00,000 RADHESHYAM FUEL CASH PURCHA. Rs. 2,00,000

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CASH 05/09 Rs. 2,00,000 CASH 06/09 Rs. 3,50,000 CASH FREIGHT PAYMENT 06/09 Rs. 2,80,377 CASH RECV KAMAL UNLCE Rs. 3,00,000 SELF CASH Rs. 2,00,000 CASH RECV KAMAL UNCLE Rs. 3,00,000 RAIGARH ISPAT CASH TO BE RECV Rs. 5,42,380 CASH Rs. 5,00,000 HAND LOAN BRC Rs. 2,37,00,000 CASH RECV ANAND NAHADIA 02/10 Rs. 20,00,000 CASH RECV SUNIL LENDRA 02/10 Rs. 25,00,000 GM ROAD LINE (A/C BRC CASH) Rs. 5,00,000 ASHOK FUEL 07/09/17 (5 CASH RECV) Rs. 5,27,484 ASHOK FUEL 15/09/17 (6 CASH RECV) Rs. 6,69,312 ASHOK FUEL (CASH 10 RECV) DT 27/11 Rs. 15,00,000 ASHOK FUEL 15/09/17 (6 CASH RECV) Rs. 1,69,312 PAID TO JMBK (CASH) Rs. 5,00,000 JMBK FOR CASH Rs. 3,00,000 CASH RECV JAGESHWAR Rs. 5,00,000 CASH DEPOSIT IN ANURAG A/C Rs. 5,00,000 CASH RECV (IN OFFICE) Rs. 2,75,000 Total Rs. 4,33,13,865

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“BRC” and that the assessee failed to furnish any evidence to substantiate that Bharat Beneficiary & Power Pvt. Ltd. is also known as “BRC”. Regarding the balance amount the Assessing Officer had taken the GP rate at 12% on the unaccounted cash transaction of Rs. 2,57,87,898/- which was upheld by the Ld. CIT(A)/NFAC. That against this addition the assessee had not field any appeal before the Tribunal. Therefore, the only point of adjudication in this Revenue’s appeal is the deletion of the hand loan of Rs. 2,37,00,00/- by the Ld. CIT(A)/NFAC. The Ld. CIT(A)/NFAC while providing relief observed and held as follows:

“During the course of appellate proceedings, I have carefully considered the submissions of the assessee and the assessment order of the Ld. AO. It is evident that the addition has been made primarily on the basis of a loose noting bearing the words Hand Loan BRC Rs. 2,37,00,000/- without any corroborative material to show that the assessee actually advanced or invested the said amount. During the course of search and seizure operation under section 132, digital data from various devices of the assessee was extracted. On analysis of the said data, a loose paper bearing the phrase "Hand Loan BRC Rs. 2,37,00,000/-" was found. The Assessing Officer held that this represented an unexplained hand loan given by the assessee, and since no satisfactory explanation was provided, the same was added as unexplained investment u/s 69. During the assessment proceedings, the assessee explained that the entry referred to a business transaction with M/s Bharat Beneficiation & Power Pvt. Ltd. (BBPL), a group concern, and that "BRC" was an informal reference to the same group. The assessee also furnished: Confirmation of account from Bharat Beneficiation & Power Pvt. Ltd.: Relevant bank statements showing fund movement; and Clarification letter explaining the relationship between the parties. The Ld. AO, however, disregarded the explanation on the ground that "BRC" and "Bharat Beneficiation" were not the same entity and that the assessee failed to produce convincing proof of such correlation. Hence, an addition of Rs. 2,37,00,000/- was made under section 69 of the Act.

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During the appeal proceeding, I have conducted an independent verification from the alleged recipient or lender. Notice u/s 133(6) of the Income Tax Act was issued to the Bharat Beneficiation & Power Pvt. Ltd. The following information was sought from the Bharat Beneficiation & Power Pvt. Ltd (AAECB3684L). 1. whether you have relation with the BRC. Kindly explain the same. 2. Have your given any loan to Shree Pariyojna Nirman Pvt. Ltd. During the F.Y. 2017-18. 3. Please furnish your bank account details alongwith statement of accounts. 4. Please provide confirmation of account for the same. In response to the above notice Bharat Beneficiation & Power Pvt. Ltd. has Submitted its reply through ITBA Portal on 06,10,2025, which is as under:- Regarding the inquiry about relation to "BRC" we would like to clarify that our company is recognized as BRC within the market. We Bharal Beneficiation & Power Pvt. Ltd. Along with our other group companies, collectively operate under the same of BRC Group. BRC specifically denotes Bharat Road Carrier, which serves as our flagship concern and is widely known by this name. Yes, during the F.Y. 2017-18 our company has extended hand loan to Shree Pariyojna Nirman Pvt.Ltd., and a copy of account confirmation and bank statement is enclosed. Aside from the transactions mentioned above, neither our company nor the BRC group engaged in any loans during the year under consideration. It is clear that, the assessee has produced confirmation of account, PAN, and bank details of Bharat Beneficiation & Power Pvt. Ltd., substantiating that the transaction was duly recorded and genuine. It is a well-settled legal position that the burden, once discharged by the assessee through cogent evidence, shifts to the assessing officer to rebut the same with credible material. Failure to utilize statutory powers to verify third-party information, especially when such an opportunity is made available by the assessee, cannot form the basis for an adverse inference. The assessee has submitted some judicial pronouncements, on the similar facts. In case of Pawan Kumar Agrawal v. CIT, Tax case no. 24 of 2011, dated 4 April 2017, the jurisdictional high court held that once the assessee discharged his burden of establishing the genuineness of unsecured loans, the AO cannot make additions merely based on

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absence of creditor appearance or third-party statements, without undertaking independent inquiry or verification. In case of Pr. CIT v. Softline Creations (P) Ltd. [2016] 387 ITR 636 (Delhi), it was held that where the AO made additions without even attempting verification of third-party confirmations, the addition was held invalid. "The AO must use the tools under the Act (like Section 133(6)) to verify the truth, and failure to do so renders the addition arbitrary." In case of DCIT v. Rohini Builders [2002] 256 ITR 360 (Guj), it was held that when the assessee had furnished loan confirmations, PANs, addresses, and the transactions were through banking channels, the AO's failure to make further inquiry is fatal to the addition. In the case of Nemi Chand Kothari v. CIT [2003] 264 ITR 254 (Gau), The Court emphasized that once the assessee has provided basic details, including confirmation letters and identity of creditors, the onus shifts to the department. "The AO cannot draw an adverse inference without making any attempt to verify the creditors or issuing summons to them under section 131 or notices under section 133(6)." In view of the above facts, legal position, and judicial pronouncements, it is held that the addition made by the Ld. AO is unsustainable. The assessee has provided sufficient documentary evidence to prove the genuineness of the transaction and same has been confirmed by Bharat Beneficiation & Power Pvt. Ltd. The assessee has satisfactorily explained the nature and source of the impugned transaction. The Assessing Officer has failed to discharge the onus of rebutting the explanation or verifying the same through independent inquiry. Hence, the addition made by Ld. AO of Rs. 2,37,00,000/- is bad in law and against the facts. Following the above mentioned decisions, the addition made by the Ld. AO is hereby deleted.”

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loan Ld. CIT-DR submitted generally in practical parlance such hand loan is given in cash only. This is therefore nothing but circular transaction of unaccounted money of the assessee which was given in cash and subsequently, received through banking channel. However, he could not adduce any evidence to substantiate his argument nor anything of that nature was emanating from order of the Revenue Authorities.

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there is a Bundle No.2 within such electronic devices wherein details of various cash transaction both payments and receipt were unearthed by the Assessing Officer. That out of the total amount of Rs. 4,33,13,865/-, the Assessing Officer accepted as genuine Rs. 2,00,000/- as withdrawn from the bank. He made addition of Rs. 2,37,00,000/- as hand loan since the assessee was unable to explain through documentary evidence before the Assessing Officer that “BRC” is the flagship concern of Bharat Beneficiaries & Power Pvt. Ltd. The Assessing Officer made further addition of GP rate of 12% on unaccounted cash transaction of Rs. 2,57,87,898/- which was upheld by the CIT(A)/NFAC. The CIT(A)/NFAC had conducted independent inquiry and had issued notices under Section 133(6) of the Act to Bharat Beneficiaries & Power Pvt. Ltd. asking for various details as enumerated in the order of CIT(A)/NFAC. That in response to such notice the said Bharat Beneficiaries & Power Pvt. Ltd. clarified that “BRC” is the flagship company i.e. Bharat Road Carrier and in the market sometimes the Bharat Beneficiaries & Power Pvt. Ltd. is also referred as “BRC”. However, the categorical difference was the Assessing Officer had treated the same amount of Rs. 2.37 crore as the loan given by the assessee whereas before the CIT(A)/NFAC it was submitted in response to the said notice under Section 133(6) that actually Bharat Beneficiaries & Power Pvt. Ltd. has extended hand loan to the assessee. The said loan confirmation and bank statement were furnished at the time of appellate stage. It is clear also

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from the assessment order that during the assessment proceedings the assessee has not submitted any confirmation from Bharat Beneficiaries & Power Pvt. Ltd. nor had filed any documentary evidences to substantiate the source of the loan of Rs. 2.37 crore. In other words after the inquiry was made by the CIT(A)/NFAC the loan confirmations as well as bank statements were filed for the first time before the Ld. CIT(A)/NFAC as additional evidences and it was a statutory responsibility of CIT(A)/NFAC to comply with Rule 46A(3) of the I.T. Rules 1962, if he was accepting such additional evidences so that the Assessing Officer could also get opportunity to record his findings regarding the genuineness of those additional evidences. Further, it is important as examined by us aforestated that at Assessing Officer stage it is stated that the hand loan was given by the assessee whereas as per the confirmation which was furnished at the appellate stage before CIT(A)/NFAC it was evident that the hand loan was received by the assessee from Bharat Beneficiaries & Power Pvt. Ltd. Hence, factually also it has to be verified at the ground level whether the assessee had extended the loan or has received the loan. The CIT(A) has suo moto relied on the loan confirmations and bank details of Bharat Beneficiaries & Power Pvt. Ltd. while providing relief to the assessee on this issue. The CIT(A)/NFAC had failed to comply with the statutory requirement of Rule 46A(3) and in absence of the said compliance the substantive rights and liabilities of the parties cannot be determined since

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the genuineness of the additional evidences produced at the First Appellate Authority stage are yet to be ascertained by the Assessing Officer through ground verification and examination. It was incumbent upon the CIT(A)/NFAC to refer such documents to the Assessing Officer for verification. Due to these irregularities the findings of CIT(A)/NFAC suffers from legal and procedural defect and even the factual element of the hand loan transactions are also yet to be conclusively determined.

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Order pronounced in the open court on 17th June, 2026.

Sd/- Sd/- AVDHESH KUMAR MISHRA PARTHA SARATHI CHAUDHURY (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; �दनांक / Dated : 17th June, 2026. Tanmay, Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to : 1. अपीलाथ� /The Appellant. 2. ��यथ� /The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G.) 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, रायपुर ब�च, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड� फ़ाइल / Guard File. आदेशानुसार / BY ORDER, //TRUE COPY// Senior Private Secretary आयकर अपील�य अ�धकरण, रायपुर / ITAT, Raipur.