DEPUTY COMMISSIONER OF INCOME TAX (E), CIRCLE 2(1), NEW DELHI, DELHI vs. POPULATION SERVICES INTERNATIONAL, DELHI

ITA 6010/DEL/2026Status: DisposedITAT Delhi05 October 2026AY 2020-218 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the impugned addition of ₹17,45,82,102/- under Section 68 of the Act, comprising unsecured loans and share capital from the assessee's directors, could not be sustained. The Tribunal noted that both heads of unsecured loan and share capital came from existing directors who had duly proved their source with detailed evidence, which was not specifically rebutted by the lower authorities. The Tribunal relied on its own decision in DCIT vs Gyscoal Alloys Ltd (ITA No. 102/Ahd/2014) and the Gujarat High Court's upholding of that order in PCIT vs Gyscoal Alloys Ltd (Tax Appeal No. 1180 of 2018). The reasoning was that Section 68 unexplained cash credits addition could not be simply invoked when the source of funds from directors was sufficiently established and not rebutted. Therefore, the lower authorities erred in law and facts by treating the unsecured loan and share capital from directors as unexplained cash credits. The addition was deleted in its entirety. The appeal concerning penalty proceedings was not explicitly decided.

What were the facts?

The assessee, ITS MY NAME PRIVATE LIMITED, filed an appeal for Assessment Year 2016-17 against the order of the Commissioner of Income Tax (Appeals) (CIT(A)) dated 30.07.2025. The CIT(A) had confirmed additions of ₹17,45,82,102/- made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, 1961. The additions pertained to unsecured loans and share capital introduced by directors, Mrs. Purnima Gupta and Mr. Rahul Gupta, and a PP Charitable Trust. The assessee contended that the AO and CIT(A) failed to consider crucial evidence, violated principles of natural justice by passing orders hastily, and mischaracterized capital receipts as revenue. The CIT(A) had previously remanded the matter to the AO for examination of additional evidence, which the AO rejected.

What were the issues?

1. Whether the impugned order of the CIT(A) confirming additions of ₹17,45,82,102/- under Section 68 of the Income-tax Act, 1961, is bad in law, against principles of natural justice, and deserves to be quashed, due to conflation of issues and misdirected reasoning by cross-applying the rationale for rejecting explanations of loans and share capital from Mrs. Purnima Gupta to the book journal entry of Mr. Rahul Gupta and PP Charitable Trust. - Assessee's Contention: The CIT(A) wrongfully cross-applied the rationale, affirmed the AO's defects, improperly rejected evidence (bank statements, confirmations, passport copies, net worth proof of Mrs. Shweta Aggarwal), made bare assertions without proving them, and rendered findings in ignorance of material facts. The addition of unsecured loan from Mr. Rahul Gupta (₹5,44,82,102) was a novation taxed as income without cash flow. The addition for unsecured loan and share capital from Mrs. Purnima Gupta (₹12,01,00,000) ignored evidence of funds sourced from her NRI sister, Mrs. Shweta Aggarwal, through NRE accounts; identity and creditworthiness were established, and the AO failed to make enquiries despite confirmations. The AO violated natural justice by passing the order on a Sunday before considering evidence submitted within the allowed time. The AO also contravened the Companies Act, 2013, by treating share capital as income instead of recognizing Mrs. Purnima Gupta as a shareholder, and mischaracterized capital receipt as revenue. - Revenue's Contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(3),Section 250(4),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI KRINWANT SAHAY

PER SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER:

This assessee’s appeal for assessment year 2016-17 is directed against the Commissioner of Income Tax (Appeal) (for short, “CIT(A)”), Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1079060892(1), dated 30.07.2025, involving proceedings u/s 143(3) of the Income Tax Act, 1961; hereinafter referred to a, “the Act”.

Heard both the parties. Case file peru

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →