ASSISTANT COMMISSIONER OF INCOME TAX, GHAZIABAD vs. SATISH BANSAL, GHAZIABAD

1 ITA No. 4079/Del/2025 ACIT Vs. Satish Bansal

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI BENCH ‘G’ NEW DELHI BEFORE YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 4079/DEL/2025 (A.Y. 2017-18) Assistant Commissioner of Vs Satish Bansal Income Tax, 201-202, 2nd Floor, Prop. Tara Steel, Industries CGO-1, Near 5/127C, Raj Nagar, Ghaziabad, PuraniHapurChungi, Kamla Uttar Pradesh Nehru Nagar, Ghaziabad, Uttar PAN: AAVPB2998P Pradesh

Appellant Respondent Assessee by Sh. Akhilesh Kumar, Adv, Shri Govind Agarwal, CA and Sh. Ashok Saxena, CA Revenue by Sh. Sahil Kumar Bansal, Sr. DR Date of Hearing 26/02/2026 Date of Pronouncement 27/04/2026

ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Revenue against the order of Ld.

Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre

(‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 22/04/2025 for the

Assessment Year 2017-18.

“1. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting addition of Rs. 22,74,893/- made by the AD holding that the assessee has explained the source of cash deposits made in its bank account during demonetization. 2. On facts and circumstances of the case and in law, while deleting the addition of Rs. 22,74,893/- the Ld. CIT(A) has

2 ITA No. 4079/Del/2025 ACIT Vs. Satish Bansal

failed to appreciate that the amount of Rs. 22,74,893/- is nothing but incremental cash sales which has been shown to justify & camouflage the cash received from undisclosed sources as cash sales which was deposited in the bank during demonetization period. 3. On facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting addition of Rs. 63,15,000/- made by the AO as unexplained loan u/s 68 of the IT Act, holding that the assessee has produced documentary evidences which conclusively establish the genuineness of the tractions without considering the fact that even after availing sufficient opportunities during assessment proceedings, the assessee failed to prove the genuineness of transactions. 4. That the Ld. CIT(A) failed to appreciate in accepting the claim of the assessee regarding obtaining the unsecured loans, the findings of the AO, which are as under: 4.1 In case Ms. Manju Goel, on of the lenders filed her ITR declaring very meagre income and the major portion of her turnover has been transferred to the bank account of the assessee without any other withdrawal to substantiate the same as business turnover. 4.2 In case of Ms. Anju Bansal, one of the lenders, the bank reflected very low average balance and either cash or credit transfers were received from third party before giving unsecured loan to the assessee. 4.3 In case of M/s Ramu Bansal HUF, on of the lenders the bank reflected two credit entries, the genuineness of which could not be proved, before advancing unsecured loan to the assessee. 5. On facts and circumstances of the case and in law, the CIT(A) has erred in not adjudicating on the applicability of the "triple test" under section 68 of the I.T. Act, 1961 in light of the binding precedent laid down by the Hon'ble Supreme Court in Principal Commissioner of Income Tax(Central)-1 vs NRA Iron & Steel (P) Ltd. (2019) 103 taxmann.com 48(SC)/[2019] 262 Taxman74(SC)/[2019] 412 ITR 161(SC)[05.03.2019]?

3 ITA No. 4079/Del/2025 ACIT Vs. Satish Bansal

“Appellant is engaged in business of trading in Iron & Steel in

name & style of Tara Steel Industries which is a proprietary

concern. Appellant has filed ITR u/s 139(1) of the Act on

03/09/2027 declaring total income of Rs. 16,22,430/-The case

was selected for complete scrutiny through CASS. Notice u/s

143(2) of the Act was issued on 24/09/2018. Thereafter, notices

u/s 142(1) of the Act and show cause notice were issued during

the assessment proceedings. It was gathered from available

records that the appellant had deposited cash of Rs.50,00,000/-

in his bank account during demonetization period. Subsequently,

the AO has completed the assessment u/s 143(3) of the Act

on20/12/2019by making addition of Rs.22,74,893/-as

undisclosed cash deposit u/s 68r.w.s 115BBE of the Act and

addition of Act Rs.63,15,000/- in respect of unexplained loans

u/s 68 r.w.s 115BBE of the Act.’

4 ITA No. 4079/Del/2025 ACIT Vs. Satish Bansal

preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order

dated 22/04/2025, allowed the Appeal of the Assessee by deleting the

additions made by the A.O. As against the order of the Ld. CIT(A),

Revenue preferred the appeal on the grounds mentioned above.

made by the A.O. which has been deleted by the Ld. CIT(A). The Ld.

Departmental Representative vehemently submitted that the Assessee

could not prove the source of the cash deposits in its bank account

during the demonetization period, however, the Ld. CIT(A) erroneously

deleted the addition and the Assessee has received the cash from

undisclosed sources and claimed as cash sale. Thus, sought for allowing

the Ground No. 1 &2 of the Assessee.

22,74,893/- being cash sale and in order to prove the same, the Assessee

has produced all the documents such as complete books of accounts,

cash book ledgers, purchase register, VAT Register, VAT Returns and day

to day Kilo Gram stocks and bills during the assessment proceedings

and after verifying those documents the CIT(A) has deleted the addition

which requires no interference at the hands of the Tribunal.

5 ITA No. 4079/Del/2025 ACIT Vs. Satish Bansal

the source of the cash deposit made during the demonetization, Assessee

submitted complete books of account viz. Cash book ledger, purchase

register, VAT Returns, day to day Kilo Gram stock register, bills during

the assessment proceedings. The Assessee has also produced daily stock

sheet along with audited accounts. At no point of time A.O. disputed the

purchase. Once purchase is accepted, A.O. cannot dispute the

corresponding sales terming as undisclosed source. Further, A.O. has

not pointed out any specific discrepancy in Assessee’s books of account.

The Ld. CIT(A) after appreciating the above facts, deleted the addition. In

the absence of any contrary material brought on record or pointed out by

the Department, we find no error or infirmity in the order of the CIT(A) in

deleting the addition of Rs. 22,74,893/-. Finding no merits in the

Ground No. 1 & 2 of the Revenue, the same are dismissed.

deleting the addition of Rs. 63,15,000/- made by the A.O. on account of

unexplained loan under Section 68 of the Act.

genuineness of the transaction before the A.O., however, the Ld. CIT(A)

has deleted the addition without appreciating the actual facts in respect

6 ITA No. 4079/Del/2025 ACIT Vs. Satish Bansal

of the three lenders. The Ld. DR relying on the orderof the A.O., sought

for allowing the Ground No. 3 to 5.

of Rs. 63,15,000/- u/S 68 of the Act on account of receipt of unsecured

loans from undisclosed sources on the ground that the creditworthiness

of the lendors were not establish beyond doubt. The Ld. CIT(A) deleted

the addition in following manners:

“Ground no. 5, 6, 7 and 8 are related to addition of Rs.63,15,000/- u/s 68 of the Act on account receipt of unsecured loans form undisclosed sources. The AO has noted that the appellant has received unsecured loans from various parties during FY 2016-17. The AO observed that the creditworthiness of Manju Goel for loan amount of Rs.31,00,000/-, Anju Bansal for loan amount of Rs.27,65,000/- and Ramu Bansal HUF for loan amount of Rs.4,50,000/- has not been established beyond doubt. The AO has noted that these persons are related to the appellant. The appellant has submitted that it has furnished complete details of all types of loans and deposits from related parties during the year under consideration along with confirmations, ITR and bank statements during the assessment proceedings. The appellant has also filed copy of account of interest paid on unsecured loans with details of TDS deducted on same. 5.3.1 In the present case, the AO has applied the provisions of section 68 of the Act by rejecting the various documents filed by the appellant and has made the addition in respect of unsecured loans obtained by the appellant. Section 68 of the Act reads as under: "Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year."

7 ITA No. 4079/Del/2025 ACIT Vs. Satish Bansal

Section 68 of the Income Tax Act, 1961 is a provision that deals with credits in the books of accounts of an assessee. The burden of proof is on the assessee to explain the nature and source of such credits. However, if the assessee provides the necessary details regarding the identity of the creditors, their financial capacity, and the genuineness of the transactions, then the burden of proof shifts to the Assessing Officer. The necessary details that an assessee needs to provide to prove the identity, creditworthiness of lender and genuineness of the cash credits include the names and addresses of the creditors, their PAN numbers, and the bank account details. 5.3.2 The matter has been examined and it is seen that the AO has pointed out that the appellant has failed to establish identity of creditor/ depositor, credit worthiness and genuineness of unsecured loans received by the appellant. This is related to the three creditors out of various creditors from whom the appellant has received unsecured loan during the year under consideration. In this regard, it is seen that that the appellant has duly fulfilled his primary burden of establishing identity of creditors by providing PAN with copy of confirmation, Further, to prove the genuineness of the transaction, the appellant furnished bank statements of the lenders. Lastly, the appellant furnished copies of income tax return of all lenders to prove their creditworthiness. This shows that the appellant has tried to discharge its duty to prove and satisfy all three ingredients of the transactions made! In this regard, it is observed that there is no independent inquiries made by the AO by issuing notices to the lenders to bring out facts negating appellants claim. 5.3.3 In the case of Orissa Cement Corporation vs. CIT reported in [159 ITR 78][TS-10-SC-1986-O], the Hon'ble Supreme Court has held the following: "it is for the department to pursue a creditor particularly once the assessee had duly furnished the complete particulars of the person from whom monies have been received by the assessee. In absence of such a burden having been discharged, the AO could not have mechanically proceeded to make impugned addition in the instant case. It is a settled law that non- compliance of notice issued u/s. 133(6) of the Act to all the entities giving unsecured loan cannot be a basis to make the addition u/s. 68 of the Act. The nature of income and source of income can be examined only by the AO of the lenders and not by the AQ of the assessee. In this case there is lack of enquiry by the AO to

8 ITA No. 4079/Del/2025 ACIT Vs. Satish Bansal

rebut the burden discharged by the assessee as no enquiries were made either from corporate entity providing unsecured loan or enquiry from AO of such corporate entity or its banker or Registrar of Companies by issuing notice u/s. 131 of the Act." 5.3.4 In the case of DCIT vs. Rohini Builders [2003] 127 Taxman 523 (Gujarat), the Hon'ble High Court has held that "Assessee had discharged initial onus by providing identity of all creditors by giving their complete addresses, GIR numbers/permanent account numbers and copies of assessment orders wherever readily available. Assessee had also proved capacity of creditors by showing that amounts were received by account payee cheques drawn from bank accounts of creditors. Repayment of loans and interest thereon was also made by account payee cheques by assessee and tax also had been deducted at source on interest payments and remitted. Assessee was not expected to prove genuineness of cash deposited in bank accounts of creditors, because under law, assessee can be asked to prove source of credits in its books of account but not source of source. Merely because summons issued to some of creditors could not be served or they failed to appear before Assessing Officer, could not be ground to treat those credits as non genuine. Considering totality of facts and circumstances of case, especially fact that Assessing Officer had not disallowed interest claimed/paid in relation to those credits in assessment year under consideration or even in subsequent assessment years, and tax at source had been deducted out of interest paid/credited to creditors, Tribunal was justified in deleting addition made. There was no substance in appeal and no substantial question of law arose, appeal was liable to be dismissed." 5.3.5 In the case of PCIT vs. Anshika Consultants (P.) Ltd. [2024] 162 taxmann.com 792 (Allahabad), the Hon'ble High Court has held that: "there was no material or evidence on record to establish that creditors were shell companies. Further, necessary documentation such as loan confirmation, certificate of incorporation, PAN number, copy of ITR, balance sheet, profit and loss account, bank statement of creditors etc. were

9 ITA No. 4079/Del/2025 ACIT Vs. Satish Bansal

provided as evidence of identity, creditworthiness and genuineness of creditor." 5.3.6. In the case of ACIT vs. Radha Madhav Developers [2024] 165 taxmann.com 578 (Nagpur-Trib), the Hon’ble ITAT has held that: "loan confirmations contained PAN of lenders and they had confirmed grant of loans in independent inquiry conducted by Assessing Officer under section 133(6). Lenders had also submitted copies of bank statements, copies of income-tax returns proving identity, genuineness and creditworthiness of transactions. Assessee and audited balance sheets need not to prove source of source and in case department was not satisfied about source of funds of lenders, it was free to proceed against lenders rather than making additions in hands of assessee Assessee had duly proved identity, genuineness and creditworthiness of transaction of receipt of unsecured loans, impugned additions made under section 68 were unjustified." 5.3.7 In the case of DCIT vs Agrawal Global Infratech (P.) Ltd.[2025] 171 taxmann.com 381 (Raipur-Trib.) the Hon'ble ITAT has held that: "Assessee-company received unsecured loans from various parties and submitted evidence in form of confirmation, ITR, computation, audited financial statements and bank statements of lenders their identity and creditworthiness and genuineness of to establish transactions. Assessing Officer was not justified in making additions under section 68 treating same as unexplained cash credit 5.3.8 Considering the facts and circumstances of the case, it is seen that the unsecured loans were taken during the normal course of business and through normal banking channels by account payee cheques and various documents such as PAN, income tax return, loan confirmations, bank accounts of lenders were produced to establish the identity, genuineness of the transaction and creditworthiness of lenders. It is considered that the appellant has discharged the burden of filing the requisite documentary evidence. AO did not undertake any further investigations to establish that evidences produced by the appellant was not acceptable. Even the loan providers were not examined /investigated. AO had no reason to reject evidences produced by the appellant without undertaking further enquiries. It is also observed that AO has not disallowed interest expenditure

10 ITA No. 4079/Del/2025 ACIT Vs. Satish Bansal

incurred by the appellant against the loan provided by the parties mentioned supra. If loans were held to be not genuine, interest expenditure should also have been disallowed. But that is not the case. Appellant has duly deducted TDS from interest payments made to loan providers. A.O. is directed to delete the addition of Rs. 63,15,000/- made u/s 68 of the Act. Thus, grounds of Appeal number 5, 6,7 & 8 are allowed.”

identity of the creditor, creditworthiness and genuineness of the

unsecured loan received by the Assessee, Assessee produced the PAN of

the creditors along-with the confirmation and the bank statement of the

lendorsand also produced Income Tax Returns of all the lenders to

prove their creditworthiness. Thus, the Assessee has discharged its duty

cast upon him to prove and satisfy the ingredients of Section 68 of the

Act. After receiving the said particulars/documents pertaining to the

lendors, A.O., failed to make any independent enquiry by issuing notices

to the lendors in order to bring on record any negative facts.

which is through normal banking channels by account payee cheques,

Assessee has produced documents such as PAN, Income Tax Return,

Loan Confirmation, bank accounts of lendors to establish the identity,

genuineness of the transaction and creditworthiness of the lendors.

Without making any further investigation, A.O. cannot brush aside the

11 ITA No. 4079/Del/2025 ACIT Vs. Satish Bansal

evidence produced by the Assessee and make the addition. Further, it is

also observed that A.O. has not disallowed the interest expenditure

incurred by the Assessee against the loan provided by the parties.

Assessee has deducted the TDS on the interest paid to the loan.

Considering the above facts and circumstances, we find no error or

infirmity in the order of the CIT(A) in deleting the addition of Rs.

63,15,000/-. Thus, we find no merits in Ground No. 3 to 5 of the

Revenue. Accordingly, Ground No. 3 to 5 of the Revenue are dismissed.

Order pronounced in the open court 27th April, 2026

Sd/- Sd/-

(RENU JAUHRI) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 27.04.2026 Reshma Naheed, Sr.P.S Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR ITAT, NEW DELHI