BALVINDER SINGH,JAMHEDPUR vs. INCOME TAX OFFICER WARD 1(3), JAMSHEDPUR

ITA 254/RAN/2024Status: DisposedITAT Surat29 September 2026AY 2011-127 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had submitted confirmations and bank statements from all persons from whom unsecured loans were taken during the period under consideration to the Assessing Officer in the remand proceedings. Copies of ITRs for AY 2010-11 and 2011-12, along with respective balance sheets and Profit & Loss accounts, were also provided. Since all creditors are assessed to income tax, their identity is beyond doubt. Furthermore, all transactions were conducted through banking channels, and details of each transaction, including bank statements showing receipt and payment, were provided for the aggregate amount of ₹16,50,000. Therefore, the identity of the parties and the genuineness of the transactions were established. The creditworthiness of the creditors was also established by their respective income tax returns and financial statements. As all three ingredients of Section 68 – identity, creditworthiness, and genuineness of the transaction – were established by the assessee, there was no justification to confirm the additions made by the Assessing Officer and upheld by the CIT(A). Consequently, the addition was deleted. The appeal was allowed.

What were the facts?

The assessee, Balvinder Singh, is appealing an order by the Addl./JCIT(A)-3, Bengaluru, dated March 30, 2024, for Assessment Year 2011-12. The Assessing Officer (AO) had made an addition of ₹16,50,000 under Section 68 of the Income Tax Act, 1961, on account of unsecured loans, stating the assessee failed to establish identity, creditworthiness, and genuineness. The CIT(A) partly allowed the appeal, deleting ₹9,15,000 of the addition based on the AO's remand report but confirming the remaining ₹7,35,000. The assessee's initial appeal to the ITAT was dismissed for non-appearance. However, a Misc. Application led to the recall of that order, and the appeal is now being heard. The assessee argues that loan details were disclosed in the audited Balance Sheet and return of income.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Learned Joint Commissioner of Income Tax(Appeals) was justified in confirming an addition of ₹7,35,000 under Section 68 of the Income Tax Act, 1961, made on account of unsecured loan, solely based on a remand report stating the bank did not enter the lender's name in the bank account, despite the transaction amount being reflected and confirmation provided. 2. Whether, on the facts and circumstances of the case, the Learned Joint Commissioner of Income Tax(Appeals) was justified in confirming the addition of ₹7,35,000 under Section 68 of the Income Tax Act, 1961, without providing an opportunity to examine evidence, documents, or cross-examine witnesses produced by the Assessing Officer, as per Rule 46 of the IT Rules. Assessee's contentions: The assessee argued that the entire reassessment proceeding is void ab initio. Without prejudice, the assessee submitted that during remand proceedings, confirmations, bank statements, ITRs, Balance Sheets, and Profit & Loss Accounts of all unsecured loan creditors were provided, establishing their identity, creditworthiness, and genuineness of transactions through banking channels. The assessee also contended that the AO's satisfaction was mechanical and hypothetical. The assessee relied on the fact that all creditors are assessed to income tax. The assessee also pointed out an increase in the unsecured loan amount in the remand report without justification and highlighted that the AO failed to consider a loan of ₹6,00,000 from Shiv Kumar Agarwal. The assessee's AR submitted that the entire addition of ₹16,50,000 should be deleted. Revenue's contentions: The learned Sr. DR supported the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI

Before: SHRI RATNESH NANDAN SAHAY & SMT. RAJANI GUDURI

For Appellant: Shri R.R. Mittal, A.R
For Respondent: Shri Ram Chandra Marndi, Sr.DR
Hearing: 27/08/2026Pronounced: 29/09/2026

PER: BENCH

1.

This appeal by the assessee is directed against the order of the Addl./JCIT(A)-3, Bengaluru [in short, the ld. CIT(A)] dated 30/03/2024 for the Assessment Year (AY) 2011-12 wherein the assessee has raised following grounds of appeal:

"

1.

For that the Learned Joint Commissioner of Income Tax (Appeals) erred in passing the impugned order dated 30th March, 2024. 2. For that the Joint Commissioner of Income-Tax (Appeals) erred in not allowing the aforesaid appeal fully filed by the assessee being the appellant herein.

3.

For that whether on the facts and circumstances of the case, the Learned Joint Commissioner of Income

The order continues below.

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