SHRIGANESH KIRANA P LTD,DELHI vs. ACIT, CC-32, DELHI

ITA 2536/DEL/2026Status: DisposedITAT Delhi30 September 2026AY 2020-2128 pages
AI SummaryAllowed

What were the facts?

The assessee, Shriganesh Kirana (P) Ltd., is in appeal against the order of the CIT(A)-30, New Delhi, for Assessment Year 2020-21. The Assessing Officer (AO) reopened the assessment based on information received from a search operation on entry providers. The AO alleged that the assessee received an accommodation entry of Rs. 1,40,00,000/- as an unsecured loan from M/s LVS Financial Services Private Limited, an entity controlled by alleged entry operators. The AO made an addition of Rs. 1,40,00,000/- under Section 68 as unexplained cash credit, Rs. 1,44,956/- as interest expenses, and Rs. 4,20,000/- under Section 69C for alleged commission. The CIT(A) upheld these additions. The assessee appealed to the ITAT.

What did the Tribunal hold?

The Tribunal held that the assessee had discharged its burden under Section 68 by establishing the identity, creditworthiness, and genuineness of the transaction. The Tribunal noted that the loan was received through banking channels via account payee cheque, and the assessee provided complete evidence, including bank statements and ledger accounts for interest payment and loan repayment. The Tribunal relied on the decision in DCIT vs. Shomit Finance Limited (ITA No. 8486/Del/2025) and other ITAT decisions where advances from lenders allegedly connected with Himanshu Verma were deleted. It also followed the principle from Capital Infra Projects (P) Ltd. vs. DCIT (ITA No. 927 and 928/Del/2019) that if an investor's investment is accepted in one company, addition for investment in another company is not permissible. The Tribunal further referred to its own decision in Real Innerspring Technologies (P) Ltd. (ITA No.647/Del/2023) which held that repayment of loan along with interest through banking channels proves the genuineness of the transaction. Consequently, grounds relating to the addition of Rs. 1,40,00,000/-, interest, and commission were allowed. The legal grounds regarding the initiation of proceedings were not adjudicated as the appeal was allowed on merits, and were kept open.

What were the issues?

1. Whether the initiation of proceedings under Section 147 and completion of assessment under Section 147/143(3) were without jurisdiction, particularly concerning the validity of the notice under Section 148 and approvals under Section 151/151A, and whether the reasons recorded constituted valid grounds for assumption of jurisdiction. - Assessee argued that the reasons recorded were mechanical, lacked application of mind, and that the notice under Section 148 was issued without valid approval and was contrary to Section 151A. - Revenue's contentions are not recorded. 2. Whether the addition of Rs. 1,40,00,000/- as an unsecured loan from M/s LVS Financial Services (P) Ltd. was erroneously held as unexplained cash credit under Section 68 read with Section 115BBE. - Assessee argued that the transaction was substantiated by documentary evidence, received through banking channels from an independent party, and that the AO lacked proper enquiry. - Revenue's contentions are not recorded. 3. Whether the addition of Rs. 1,44,956/- on account of interest paid to the creditor was eligible for deduction under Section 36(1)(ii). - Assessee argued that the addition was erroneous. - Revenue's contentions are not recorded. 4. Whether the addition of Rs. 4,20,000/- for alleged commission expenditure was justified under Section 69C.

Which sections of the Income-tax Act were involved?

Section 132,Section 148,Section 147,Section 143(3),Section 142(1),Section 68,Section 69C,Section 115BBE,Section 36(1)(ii),Section 151,Section 151A

AI-generated summary — verify with the full judgment below

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

For Appellant: Shri Lalit Mohan, CA, Shri Ankit Kumar, Advocate
For Respondent: Shri Saurav Narayan Modi, CIT DR
Hearing: 14.07.2025

PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :

1.

The assessee has filed appeal against the order of the Learned Commissioner of Income Tax (Appeals)-30, New Delhi [“Ld. CIT (A)”, for short] dated 14.02.2026 for the Assessment Year 2020-21. 2. Brief facts of the case are, the case of the assessee was reopened by the AO for AY 2020-21 on the basis of High Risk CRIU/VRU information received on the basis of the search u/s 132 of the Income-tax Act, 1961

2 (for short ‘the Act’) conducted on 17.11.2021 on Galaxy Group, Shri Pradeep Indra Prasad Agrawalla and entry providers, Shri Deepak Agarwal and Shri Himanshu Verma and it was mentioned therein that the a

The order continues below.

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