DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-25, DELHI, DELHI vs. KAMADGIRI EXPORTS PRIVATE LIMITED, DELHI

ITA 4118/DEL/2026Status: DisposedITAT Delhi29 September 2026AY 2020-2115 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Ld. CIT(A) rightly deleted the addition of unsecured loan under Section 68 of the Act. The assessee had discharged its burden by establishing the identity of the creditor, the creditworthiness of the creditor (considering earning capacity and ability to make payment), and the genuineness of the transaction. The loan was received and repaid through banking channels, supported by bank statements and ledger accounts. The Tribunal followed the coordinate bench decision in Real Innerspring Technologies (P.) Ltd., which held that loans repaid along with interest through banking channels indicate genuine transactions, and every transaction must be evaluated on its merit rather than suspicion. Consequently, the grounds raised by the Revenue were dismissed. The issue regarding commission under Section 69C was implicitly decided in favour of the assessee as the Tribunal dismissed all grounds raised by the Revenue, implying agreement with the Ld. CIT(A)'s deletion of this addition. The appeals for both AYs 2019-20 and 2020-21 were dismissed.

What were the facts?

The Revenue filed appeals against the order of the Ld. CIT(A) for Assessment Years (AYs) 2019-20 and 2020-21. The appeals were filed with a delay of 15 days, which the Tribunal condoned due to reasonable cause. The assessee, Kamadgiri Exports Private Ltd., had its case reopened based on a search action on entry providers, Shri Deepak Agarwal and Shri Himanshu Verma. Information seized suggested the assessee was a beneficiary of accommodation entries totaling Rs. 2,00,00,000/- from M/s Albatross Homes Private Ltd., controlled by Shri Himanshu Verma. The Assessing Officer (AO) made additions of Rs. 2,00,00,000/- under Section 68, Rs. 6,00,000/- for commission under Section 69C, and Rs. 61,274/- for interest under Section 69C. The Ld. CIT(A) deleted these additions, leading to the Revenue's appeals.

What were the issues?

1. Whether the addition of Rs. 2,00,00,000/- as unsecured loan under Section 68 of the Income-tax Act, 1961, is sustainable when the assessee has established the identity, creditworthiness, and genuineness of the transaction with M/s Albatross Homes Private Ltd. (Assessee's contention: The Ld. CIT(A) rightly deleted the addition as the assessee satisfied all tests of identity, creditworthiness, and genuineness, and the loan was repaid through banking channels. Reliance was placed on ITAT decisions in Real Innerspring Technologies (P.) Ltd., DCIT vs. Shri Mahavir Pulses Pvt. Ltd., and Dazzling Construction (P.) Ltd. Revenue's contention: The conditions of Section 68 were not fulfilled as the transaction was with a bogus and dummy company identified during a search.) 2. Whether the addition of Rs. 6,00,000/- on account of presumptive commission under Section 69C of the Act is sustainable. (Assessee's contention: The addition is arbitrary, lacks direct or circumstantial evidence of actual payment, and is based solely on the AO's presumption of an accommodation entry. Reliance was placed on the Ld. CIT(A)'s findings that additions under Section 69C require concrete evidence of actual expenditure and cannot be based on general practices of entry operators. Revenue's contention: Not explicitly recorded, but implied reliance on the assessment order's findings.)

Which sections of the Income-tax Act were involved?

Section 132,Section 148,Section 143(2),Section 142(1),Section 147,Section 68,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES ‘F’: NEW DELHI.

Before: SHRI S.RIFAUR RAHMAN & SHRI VIMAL KUMAR

For Appellant: Shri Ranjan Chopra, CA
For Respondent: Shri K. Hauthang, CIT DR
Hearing: 13.08.2026

PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :

1.

The Revenue has filed appeals against the order of the Learned Commissioner of Income Tax (Appeals)-29, New Delhi [“Ld. CIT (A)”, for short] dated 10.12.2025 for the AYs 2019-20 and 2020-21. 2. At the time of filing of appeal, the Registry has pointed out a defect that both the appeals are time barred by 15 days. In response thereof, the ld. DR for the Revenue submitted that there was a reasonable cause for the delay in filing the appeal. Accordingly, he prayed that the delay in filing the appeals be condoned. We have heard both the counsels on the issue of condonation of delay. In our considered opinion, there was a reaso

The order continues below.

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