INCOME-TAX OFFICER, WARD-1(3), JAIPUR, NCRB, JAPUR vs. M/S GIRDHAR JEWEELERS PRIVATE LIMITED, JAIPUR

ITA 1856/JPR/2025Status: DisposedITAT Cochin29 September 2026AY 2022-238 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal. Regarding Grounds 1 and 2, the Tribunal held that the CIT(A) correctly exercised powers under Section 250(4) by calling for a remand report. The additional evidence was not admitted directly but forwarded for verification. The AO examined the evidence and submitted findings, confirming the genuineness of transactions. Therefore, the admission of additional evidence did not violate Rule 46A. For the remaining grounds, the Tribunal noted that the AO's remand report contained no adverse remarks on the loan transactions. The report summarized the lenders: M/s Anantnath Skycon Pvt. Ltd. (Rs. 4.25 crore, repaid with interest, TDS deducted, lender's income Rs. 666.71 crore), M/s Pitamber Commodities Futures Pvt. Ltd. (Rs. 1 crore, related concern, squared up, lender's loss Rs. 31.68 lakh), M/s Motisons Commodities Pvt. Ltd. (Rs. 79.40 lakh, repaid with interest, TDS deducted, lender's income Rs. 1.08 lakh), and Shri Prashant Tibrewala (Rs. 3.09 crore, Director/shareholder, transactions through running account, lender's income Rs. 20.18 lakh). The Tribunal found that the AO was satisfied with the identity, creditworthiness, and genuineness of these transactions, as reflected in the remand report. Consequently, the remaining grounds raised by the Revenue were also found to be devoid of merit.

What were the facts?

The assessee, M/s. Girdhar Jewellers Private Limited, engaged in jewellery and bullion, filed its return for AY 2022-23 declaring Rs. 27,92,980. The return was selected for scrutiny due to large unsecured and squared-up loans. The Assessing Officer (AO) issued a show cause notice proposing to treat Rs. 9.14 crores as unexplained cash credit under Section 68, taxable under Section 115BBE. The AO made additions of Rs. 5.25 crores for squared-up loans and Rs. 3.89 crores for fresh unsecured loans. The assessee appealed to the CIT(A), providing additional documents. The CIT(A) called for a remand report from the AO, who verified the loan transactions, repayments, interest payments with TDS, and the lenders' financial standing and tax filings. Based on this report, the CIT(A) deleted the additions.

What were the issues?

1. Whether the CIT(A) was justified in deleting the addition of Rs. 9,14,00,000/- made by the AO under Section 68, considering the assessee's alleged failure to furnish adequate explanation or evidence during assessment proceedings? 2. Whether the CIT(A) was justified in admitting additional evidence under Rule 46A without recording a proper finding regarding "sufficient cause" for non-production before the AO? 3. Whether the CIT(A) was justified in relying on the remand report as conclusive proof of genuineness, ignoring that the AO had not verified the financial capacity or creditworthiness of the lenders and merely reproduced submitted documents? 4. Whether the CIT(A) failed to consider that the assessee did not establish the creditworthiness of lenders, many with meagre incomes or losses, thus lacking financial ability to advance the loans? 5. Whether the CIT(A) ignored the fact that the assessee failed to establish the source of repayment of over Rs. 5 crore, despite declaring a low income, thus failing to satisfy Section 68 requirements regarding the source of both receipt and repayment? Assessee's arguments: The assessee supported the CIT(A)'s order and the AO's remand report, highlighting no adverse remarks regarding loan transactions, repayments, interest, and TDS. They relied on Smt. B. Jayalakshmi Vs. ACIT (2018) for the proposition that if CIT(A) allows claims based on AO's remand report, the Revenue's appeal is not maintainable. Revenue's arguments: The Revenue supported the AO's order and requested confirmation of the addition. Their grounds of appeal focused on the CIT(A)'s alleged failure to appreciate the assessee's lack of explanation during assessment, improper admission of additional evidence, reliance on the remand report without proper verification of creditworthiness, and failure to establish the source of repayment.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 250(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta & Shri T. R. Senthil Kumar

For Appellant: Shri Rohan Sogani, CA
For Respondent: Shri Anand Swaroop, CIT, Shri Rohan Sogani, CA

PER : T. R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Revenue as against the appellate order dated 15.10.2025 passed by Commissioner of Income Tax (Appeal), National Faceless Appeal Centre, Delhi, arising out of assessment order passed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to Asst. Year 2022-23. I.T.A No. 1856/JPR/2025 Page No 2 M/s. Girdhar Jewellers Private Limited

2.

Brief facts of the case are that the assessee is a private limited company engaged in the manufacture and trading of gold and silver jewellery and bullio

The order continues below.

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