DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-25, DELHI, DELHI vs. NEW AGE INFOSYS PRIVATE LIMITED, DELHI
What did the Tribunal hold?
The Tribunal dismissed all three appeals filed by the Revenue. For AY 2017-18, concerning the addition of Rs. 1,33,49,191/- under Section 69A, the Tribunal found that the CIT(A) had rightly deleted the addition. The assessee had discharged its burden by establishing the identity, creditworthiness, and genuineness of the lender, M/s. Lenient Consultants Pvt. Ltd., through banking channels, confirmations, bank statements, and ledger accounts. The Tribunal followed the decision of a coordinate bench in the case of Real Innerspring Technologies (P) Ltd. and its own detailed findings for AY 2016-17. Similarly, for the addition of Rs. 8,49,191/- under Section 69C for AY 2017-18, the Tribunal upheld the CIT(A)'s deletion. It observed that the addition was ad-hoc and made without any independent evidence of incurring or paying interest expenditure. The Tribunal noted that the AO had not brought any cogent evidence to establish the actual payment of interest, and once the genuineness of the underlying transaction was supported by documentary evidence, the consequential allegation of interest payment, unsupported by independent evidence, could not be sustained on conjectures. The Tribunal also noted that the AO should have examined this during the original assessment if warranted. Consequently, the appeals for AY 2017-18 were dismissed. The cross-objections filed by the assessee were not adjudicated on merits as the Revenue's appeals were dismissed, and were kept open.
What were the facts?
The Revenue filed appeals against the orders of the CIT(A) for Assessment Years (AY) 2016-17 and 2017-18, challenging the deletion of additions made by the Assessing Officer (AO). The assessee, New Age Infosys Private Ltd., filed cross-objections. The Revenue's appeals were found to be time-barred by 22 days, but the delay was condoned due to reasonable cause. The core of the dispute involves additions made under Section 69A and Section 69C of the Income Tax Act, 1961, relating to alleged unexplained money received as loans and interest paid on such loans from entities identified as paper companies controlled by one Deepak Agarwal. The CIT(A) had deleted these additions, leading to the Revenue's appeals.
What were the issues?
1. Whether the CIT(A) was justified in deleting the addition of Rs. 3,50,00,000/- from M/s. SW Consultants Pvt. Ltd. and Rs. 2,50,00,000/- from M/s Lenient Consultant Pvt. Ltd. under Section 69A on account of unexplained money paid to paper entities controlled by Deepak Agarwal (Revenue's appeal for AY 2016-17, Ground a). 2. Whether the CIT(A) was justified in deleting the addition of Rs. 65,00,000/- (Rs. 20,00,000/- loan from M/s SW Consultants Pvt. Ltd. and Rs. 45,00,000/- from M/s Lenient Consultants Pvt. Ltd.) (Revenue's appeal for AY 2016-17, Ground b). 3. Whether the CIT(A) was justified in deleting the disallowance of interest expenditure of Rs. 16,39,455/- as consequential to accommodation entries (Revenue's appeal for AY 2016-17, Ground c). 4. Whether the CIT(A) was justified in deleting the disallowance of commission expenditure of Rs. 19,95,000/- as consequential to accommodation entries (Revenue's appeal for AY 2016-17, Ground d). 5. Whether the CIT(A) was justified in deleting the addition of Rs. 1,33,49,191/- under Section 69A on account of money repaid to M/s Lenient Consultant Pvt. Ltd. (Revenue's appeal for AY 2017-18, Ground a). 6. Whether the CIT(A) was justified in deleting the addition of Rs. 8,49,191/- under Section 69C on account of interest paid to M/s Lenient Consultant Pvt. Ltd. (Revenue's appeal for AY 2017-18, Ground a). Assessee's Contention: The assessee argued that it had filed its return of income and provided all relevant details. The additions were deleted by the CIT(A) based on the assessee establishing the identity, creditworthiness, and genuineness of the transactions. The assessee relied on the CIT(A)'s findings and decisions of coordinate benches. Revenue's Contention: The Revenue contended that the entities were paper companies controlled by Deepak Agarwal, involved in providing accommodation entries and routing unexplained money. The AO's findings, based on search proceedings, established the nature of these entities and their involvement in a syndicate for organized accommodation entries. The Revenue argued that the conditions of Section 68 were not fulfilled and relied on the AO's assessment order and findings from search operations.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘A’: NEW DELHI
Before: SHRI MAHAVIR SINGH & SHRI S.RIFAUR RAHMAN
Heard together (6 matters)
Read from the judgment's own cause title. This page is filed under one of them.
PER S.RIFAUR RAHMAN, AM:
These appeals are filed by the Revenue against the order passed by the ld. Commissioner of Income-tax (Appeals)-29, New Delhi [for short ‘ld. CIT (A)] dated 26.02.2026 for the Assessment Years 2016-17, 2017-18 and 2017-18. The assessee has also filed cross objections against
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