PRASHANTKUMAR BHUPATBHAI GAJERA,AHMEDABAD vs. INCOME TAX OFFICER, WARD-3(3)(5), AHMEDABAD

PDF · subscribers
ITA 1435/AHD/2025Status: DisposedITAT Ahmedabad22 April 2026AY 2018-198 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had discharged the primary onus by providing confirmations, bank statements, PAN details, and ITRs of the lenders. The repayment of loans in subsequent years was also considered significant.

What were the facts?

The assessee declared income and later had their assessment reopened based on allegations of non-genuine unsecured loans. The Assessing Officer added the loans under Section 69A, which was confirmed by the CIT(A).

What were the issues?

Whether the addition of unsecured loans under Section 69A was justified when the assessee provided sufficient evidence of identity, genuineness, and creditworthiness of the lenders, and whether the transaction should have been examined under Section 68.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148A,Section 148,Section 69A,Section 115BBE,Section 68,Section 234A,Section 234B,Section 234C,Section 270A,Section 271AAC

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH

Before: DR. BRR Kumar & Shri T. R. Senthil Kumar

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH Before: DR. BRR Kumar, Vice President And Shri T. R. Senthil Kumar, Judicial Member

ITA No: 1435/Ahd/2025 Assessment Year: 2018-19

Prashantkumar Bhupatbhai The ITO Gajera. Ward-3(3)(5), AT-20 Maruti Bunglows, Nr. Vs Ahmedabad Sukan Cross Road, Nikol, Ahmedabad-382330, Gujarat PAN: ALLPG3158R (Appellant) (Respondent) Assessee Represented: Shri Mehul Thakkar, AR Revenue Represented: Shri Nitin Kulkarni, Sr. D.R.

Date of hearing : 26-02-2026 Date of pronouncement : 22-04-2026 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

This appeal is filed by the Assessee as against the appellate order dated 16-05-2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Years 2018-19.

ITA No: 1435/Ahd/2025, Asst. Year: 2018-19 2 Prashantkumar Bhupatbhai Gajera Vs. The ITO

2.

Brief facts of the case is that the assessee is an individual, filed his return of income for the assessment year 2018-19 on 30.11.2018 declaring total income of Rs. 6,08,040/-. The assessee was getting partnership income from two firm. The return was processed under section 143(1)(a) of the Act accepting the returned of income. The assessment was reopened on the ground that the assessee received unsecured loans from Navnitbhai Dhanjibhai Patel (HUF), Juvenile Solutions Private Limited and Rajan Pharma Science Private Limited to the tune of Rs. 3,24,92,609/-, which were found to be not genuine. Therefore, notice under section 148A(b) of the Act was issued to the assessee on 17.03.2022, as to why not the unsecured loans should be disallowed. The assessee failed to reply to the show cause notice, thereby the Assessing Officer passed an order under section 148A(d) of the Act dated 31.03.2022 and also issued a notice under section 148 of the Act.

2.1 In response, the assessee filed a return of income as the same total income declared in the original return. During reassessment proceedings, the assessee submitted various details; however, the Assessing Officer confirmed unsecured loans availed from Navnitbhai Dhanjibhai Patel (HUF) as not genuine and added unsecured money under section 69A of the Act and taxed under section 115BBE of the Act.

2.2 Aggrieved against the reassessment order, the assessee filed an appeal before the CIT(A), who confirmed the addition, in spite of the fact that the assessee repaid the entire loan in subsequent assessment years.

ITA No: 1435/Ahd/2025, Asst. Year: 2018-19 3 Prashantkumar Bhupatbhai Gajera Vs. The ITO

3.

Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal: “1. The learned CIT(A) has erred in law and on facts in confirming the addition of Rs 2,17,00,000/- made by the Assessing Officer u/s 69A of the Income Tax Act, 1961 without appreciating that the appellant had duly discharged the burden of proof by furnishing confirmations, bank statements, PAN details, and ITRs of the lender, establishing identity, genuineness, and creditworthiness. 2. The learned CIT(A) has further erred in upholding the addition under section 69A instead of examining it under section 68 of the Act. The impugned amount represented a loan transaction through banking channels and was recorded in the regular books of accounts, thereby taking the transaction outside the purview of section 69A. 3. The authorities below have adopted a mechanical and presumptive approach by branding the transaction as an "engineered transaction" without bringing any cogent material or evidence on record to support such an allegation. 4. The lower authorities erred in placing the onus on the appellant to prove the "source of source", which is not warranted in law, especially where the primary onus regarding the identity and creditworthiness of the lender and genuineness of the transaction had been discharged. 5. Both the lower authorities have erred in law and on facts in taxing the assessed income u/s 115BBE of the Act. 6. The learned CIT (A) has erred in law and on facts of the case in confirming action of the Id. AO in charging interest u/s. 234A, 234B, 234C of the Act. 7. The learned CIT (A) has erred in law and on facts of the case in confirming the action of the learned AO in initiating penalty u/s 270A, 271AAC (1). 8. The appellant craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.” 4. Learned counsel appearing for the assessee filed a paper book running into 341 pages, wherein the assessee filed the details of ledger account, bank statement of the assessee and the lender, confirmation from the lender, ITR, balance sheet, repayment of loan and assessment order accepting the repayment of loan and making nil addition for the

ITA No: 1435/Ahd/2025, Asst. Year: 2018-19 4 Prashantkumar Bhupatbhai Gajera Vs. The ITO

subsequent assessment year 2019-20. Thus, learned counsel submitted that the entire reassessment itself is bad in law as the assessee has discharged his initial onus cast upon it and relied on various case laws.

5.

Per contra, learned Senior D.R. appearing for the Revenue supported the orders passed by the lower authorities and requested to confirm the same.

6.

We have given our thoughtful consideration and perused the materials available on record. The assessee has fully discharged the primary onus cast upon him by filing following documents which are available in the paper book, as follows:

“a) Confirmation of Lender (PB 58-60) b) PAN of lender (PB 61) c) Bank statement of lender evidencing RTGS transfer (PB 62- 69). d) ITR of Lender (PB 70 of Paper Book) e) Balance Sheet of lender (PB 92). f) Break-up of loans showing appellant as borrower (PB 93). g) Ledger account from appellant's books, duly confirmed (PB 29). h) Compliance by lender to notice issued under section 133(6) of the Act (PB 39-40) i) Repayment evidence along with corresponding Bank Statements (PB 171-204).”

6.1 Further, the assessee has also repaid the loan, as follows:

ITA No: 1435/Ahd/2025, Asst. Year: 2018-19 5 Prashantkumar Bhupatbhai Gajera Vs. The ITO

6.2 Apart from repaying the above loan, the assessee continued financial transactions with the same lender and took fresh loans as under:

6.3 The assessee also submitted that it had paid interest on such loans and necessary TDS has been deducted on such interest payment. The assessee further submitted that loans received during the year are repaid in subsequent Assessment Years i.e. upto 2020-21. Therefore, the addition u/s.68 of the Act cannot be made merely on the ground that loan creditors have shown meagre income or addition was made based upon statement of entry provider. These facts could not be controverted by the Revenue with any material evidences.

7.

The Hon’ble Jurisdictional Gujarat High Court in the case of Ayachi Chandrashekhar Narsangji [2014] 42 taxmann.com 251 (Guj) it was held as follows: “Section 68, read with section 143, of the Income-tax Act, 1961 - Cash credit [Loans] -Assessment year 2006-07 - Assessing Officer framed assessment under section 143(3) wherein he made addition of Rs. 1.45 crore under section 68 on ground that loan taken from one ‘IA’ was not explained satisfactorily - On appeal, Commissioner (Appeals) was satisfied with respect to genuineness of transaction

ITA No: 1435/Ahd/2025, Asst. Year: 2018-19 6 Prashantkumar Bhupatbhai Gajera Vs. The ITO

and creditworthiness of MA' and, therefore, deleted addition - It was found that total loan of Rs. 1.60 crore was advanced to assessee, out of which Rs.15 lakh was repaid - Therefore, an amount of Rs.1.45 crore remained outstanding to be paid to ‘IA’ - Balance loan amount was repaid by assessee in immediately next financial year - Whether when Department had accepted same, addition made by Assessing Officer was to be deleted - Held, yes [Para 6] [In favour of assessee]

7.1 In the case of CIT Vs. Shri Mahavir Crimpers, [2018] 95 taxmann.com 323 (Guj.) wherein it has been held as follows:

"5. We have heard both the parties. There is no dispute so far as identity of the creditor party M/s. Raj Capital & Finance Pvt. Ltd. is concerned. There is further no quarrel that the Assessing Officer does not dispute the fact that the assessee has not availed any cash loan from the said entity. His only case is that the assessee has not been able to prove source along with genuineness and creditworthiness of the above stated entity. It emanates from above extracted portion that the assessee has filed all relevant details along with assessment records of the said entity explaining source of the loans to the above entity's balance sheet indicating sufficient reserves, surplus and share premium as followed by repayment in succeeding assessment year. Learned Departmental Representative fails to rebut CIT (A)'s conclusion that the assessee has been having regular loan transactions with the said entity. We notice in this backdrop that Hon'ble Jurisdictional high court's decision in DCIT v. Rohini Builders, (2002) 256 ITR 360 (Guj) upholding tribunal's conclusion deleting Section 68 addition in view of identical details; squarely applies here. So in their lordships' latter decision in CIT v. Ayachi Chandrashekhar Narsangji (2014) 42 taxmann.com 251 (Guj) confirming this tribunal's another decision reversing Section 68 addition wherein the department head accepted repayment of loan in subsequent year to be correct. We take into account all these facts and judicial precedents to affirm CIT(A)'s findings under challenge deleting the impugned addition. This first substantive ground is accordingly declined." 7.2 In the case of DCIT Vs. Rohini Builders, [2002] 256 ITR 360 (Guj.) wherein it has been held as follows: “Once primary documents are given, onus shifts from assessee to revenue. In absence of anything contradictory brought on the table, it wouldn't be fair to confirm addition u/s 68 of the Act. Gujarat High Court went on to the extent of confirming that even if creditors didn't turn up on issue of summons, even then, the transaction can't be termed as bogus because preliminary documents have been put forth by the assessee and nothing contradictory is observed by the

ITA No: 1435/Ahd/2025, Asst. Year: 2018-19 7 Prashantkumar Bhupatbhai Gajera Vs. The ITO

revenue. It was contended by revenue that "creditworthiness" continues to remain unproved because a few alleged parties were having a meagre income as against hefty deposits made. To this argument, the court held that assessee's duty is discharged once it shows the bank statement of the depositor. It is not assessee's look out to find out source to source, and get into the subject of how the creditor could afford that money. Source is what is required to be proved by the assessee, and the onus immediately gets discharged on submission of preliminary documents like a bank statement of the depositor. Also, if the revenue seriously felt that the source to source was bogus, in which case the resultant addition would fall in the hands of the depositors or investors u/s 69 of the Act. As far as assessee is concerned, he is required to prove that the alleged depositor or creditor, as the case be, had legitimate monies which were given to assessee through banking channel. How that monies were earned and whether or not the depositor is showing it in his personal return of income is beyond the scope of the assessee; if there are any doubts on the source to source then revenue can always approach the depositor."

7.3 In similar circumstances, the Hon’ble Jurisdictional High Court in the case of PCIT Vs. Ojas Tarmake (P.) Ltd. reported in [2023] 156 taxmann.com 75 held as follows:

“Where assessee showed unsecured loans received during relevant assessment year and AO made addition on ground that assessee failed to discharge onus of liability as laid down under section 68, since amount of loan received by assessee was returned to loan party during year itself and all transactions were carried out through banking channels, impugned addition was to be deleted.”

7.4 Similarly Jurisdictional High Court in the case of PCIT Vs. Ganesh Plantation Ltd. [2022] 134 taxmann.com 149 held as follows:

“Where Assessing Officer initiated reassessment on basis of Information that search in case of Venus Group showed that amount of Rs. 4 crores had been received by assessee from Builders of Venus Group through banking channel against corresponding payment of unaccounted cash by assessee to Builders, and considered this as accommodation entry and made addition under section 68, since no live link/proximate nexus of alleged dubious transactions between searched person and assessee had been brought on record, said addition was to be deleted.”

ITA No: 1435/Ahd/2025, Asst. Year: 2018-19 8 Prashantkumar Bhupatbhai Gajera Vs. The ITO

8.

Respectfully following the above judicial precedents, we find merits in the grounds raised by the assessee and the addition of Rs.2,17,00,000/- made under Section 69A of the Act is hereby deleted. 9. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 22 -04-2026

Sd/- Sd/- (DR. BRR KUMAR) (T.R. SENTHIL KUMAR) VICE PRESIDENT JUDICIAL MEMBER Ahmedabad : True Copy Dated 22/04/2026 (DS) 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, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →