J S INFRASTRUCTURE,AMBERNATH vs. ACIT, CENTRAL CIRCLE-2, THANE, THANE

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ITSSA 3120/MUM/2025Status: DisposedITAT Bangalore23 December 2025AY 2017-186 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had discharged its primary onus under Section 68 by providing complete details of the unsecured loan received and repaid through banking channels, corroborated by bank statements, financial statements, confirmation letters, and the return of income filed by the parties. The Tribunal noted that the lower authorities did not dispute these documents nor held them to be non-genuine, and crucially, there was no discussion of this documentary evidence in their orders. The Tribunal emphasized that no incriminating material pertaining to the assessee was seized during the search in the case of M/s. Patel RPL Realty Group, except for the assessee's ledger account which was part of its regular books of account. Citing the Hon'ble Apex Court's decision in Abhisar Buildwell (P.) Ltd., the Tribunal held that in the absence of any incriminating material found during search, no addition can be made in respect of completed or unabated assessments. Therefore, the Tribunal found no justification for the addition and directed its deletion. The issue regarding the notice u/s. 143(2) was implicitly addressed by allowing the appeal based on the lack of incriminating material and the sufficiency of evidence provided by the assessee.

What were the facts?

The assessee, M/s. JS Infrastructure, a partnership firm engaged in construction and real estate development, filed its return for AY 2017-18 declaring 'Nil' income. Following a search in the case of M/s. Patel RPL Realty Group on 08.08.2019, documents pertaining to the assessee were found. The Assessing Officer (AO) issued a notice u/s. 153C on 17.09.2020. The assessee filed a return declaring 'Nil' income. The AO sought details regarding an unsecured loan of Rs. 50,00,000 from M/s. Kesari Gems Pvt. Ltd. The AO, after considering submissions, passed an assessment order u/s. 153C on 25.09.2021, making an addition of Rs. 50,00,000 u/s. 68. The CIT(A) upheld this addition. The appeal before the ITAT was filed with a delay of 2 days, which was condoned.

What were the issues?

1. Whether the impugned block assessment order is against natural justice and bad in law, warranting annulment? (Question of law). The assessee argued that no incriminating material was found during the search pertaining to it, and the addition was based solely on a ledger account from regular books of account. The assessee contended it had furnished sufficient evidence, including creditor confirmation and bank statements, to prove the loan's genuineness and discharged its primary onus under Section 68. The assessee also argued that notice u/s. 143(2) was not issued. 2. Whether the CIT(A) was justified in upholding the addition of Rs. 50,00,000 from Kesari Gems Pvt. Ltd. under Section 68, based on non-incriminating material and inadequate consideration of the explanation and supporting documents? (Question of mixed law and fact). The assessee reiterated its arguments from issue 1 regarding the lack of incriminating material and the sufficiency of its evidence. The Revenue contended that the transactions were not genuine and were accommodation entries. It argued that notices u/s. 133(6) were not served as the persons were not found. Regarding incriminating material, the Revenue argued that allegations and specific information found during investigation also constitute incriminating material. The Revenue also relied on the CIT(A)'s finding that notice u/s. 143(2) is not mandatory for assessments u/s. 153A/153C.

Which sections of the Income-tax Act were involved?

Section 68,Section 132,Section 153C,Section 139(1),Section 142(1),Section 133(6),Section 143(2),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: AND SHRI OMKARESHWAR CHIDARA, AM

For Appellant: Shri Vivek Perampurna, CIT- DR
For Respondent: Shri Vivek Perampurna, CIT- DR
Hearing: 29.09.2025Pronounced: 23.12.2025

IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI

BEFORE MS. KAVITHA RAJAGOPAL, JM AND SHRI OMKARESHWAR CHIDARA, AM

IT(SS)A No.3120/Mum/2025 (Assessment Year: 2017-18)

M/s. JS Infrastructure, ACIT, Central Circle-2, Ashar IT Park, 6th Floor, Plot No.30, Jivandeep Apartment, Vs. Station Road, Ambernath (E), Wagle industrial Estate, Thane – 421 501 Thane – 400 604 PAN:AAHFJ6630Q (Appellant) (Respondent) :

: Shri Vijay Patel Assessee by Respondent by : Shri Vivek Perampurna, CIT- DR

Date of Hearing : 29.09.2025 Date of Pronouncement : 23.12.2025

O R D E R Per Kavitha Rajagopal, JM:

This appeal has been filed by the assessee, challenging the order of the Learned

Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’ for short], passed u/s. 250 of the

Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short)

2017-18.

2.

It is observed that the present appeal has been filed belatedly with a delay of 2 days

beyond the period of limitation. The assessee had filed an application for condoning the

said delay along with an affidavit. Upon perusal of the same, we deem it fit to hold that

the assessee had “sufficient cause” for the delay and hence the delay is condoned.

IT(SS)A No.3120/Mum/2025 M/s. JS Infrastructure 3. The assessee has raised the following grounds of appeal:

“1. That, the learned CIT(A)-11, Pune has grossly erred in not considering the impugned block assessment order passed is against natural justice and bad in law. The AO may please be directed to annul the impugned block assessment order. 2. That, the learned CIT(A)-11, Pune is not justified in upholding the addition Rs.Rs.50,00,000 from Kesari Gems Pvt. Ltd. u/s.68 on the basis of non-incriminating material and the explanation along with cogent supporting submitted to the entire satisfaction of the AO. The Assessing Officer may please be directed to delete such addition. 3. The appellant craves leave to add, alter, and amend any ground/s of an appeal on or before hearing of the appeal.”

4.

Brief facts of the case are that the assessee is a partnership firm engaged in the

business of construction and real estate development and had filed its return of income

dated 28.07.2017 u/s. 139(1) of the Act declaring total income at “Rs.Nil” for the year

under consideration. Pursuant to a search and seizure action u/s. 132 of the Act conducted

in the case of M/s. Patel RPL Realty Group dated 08.08.2019 certain documents were found

which pertained to the assessee and the Learned Assessing Officer (“Ld. AO” for short)

after recording his satisfaction issued notice dated 17.09.2020 u/s. 153C of the Act through

ITBA which was duly served upon the assessee. In response to the same, the assessee filed

its return of income dated 28.09.2020 declaring total income at “Rs.Nil”. Notice u/s.

142(1) of the Act was also issued to the assessee seeking for details pertaining to unsecured

loan received from M/s. Kesari Gems Pvt. Ltd. amounting to Rs.50,00,000/-. After

considering the assessee’s submission the Ld. AO passed the assessment order u/s. 153C

of the Act dated 25.09.2021 determining total income at Rs.50,00,000/- u/s. 68 of the Act.

5.

Aggrieved, the assessee was in appeal before the first appellate authority, who vide

order dated 27.02.2025 upheld the addition made by the Ld. AO on the ground that the

IT(SS)A No.3120/Mum/2025 M/s. JS Infrastructure assessee has failed to substantiate the genuineness of the loan as per the requirement of

section 68 of the Act.

6.

Aggrieved, the assessee is in appeal before us, challenging the order of the Ld.

CIT(A).

7.

The Learned Authorized Representative (“Ld. A.R.” for short) for the assessee

commenced the arguments stating that there was no incriminating material found during

the search pertaining to the assessee. The Ld. A.R. further contended that addition was

made merely on the basis of the ledger account extracted from the tally software which

was part of the regular books of account. The Ld. A.R. submitted that the Ld. CIT(A) has

erred in not considering the evidences that were furnished by the assessee to substantiate

that the loan availed by it was genuine. The Ld. A.R. brought our attention to the

confirmation given by the creditor supported by the bank statements furnished by the

assessee. The Ld. A.R. further contended that the creditor’s details were also furnished by

the assessee before the lower authorities to substantiate that it had sufficient source to

extend loan to the assessee. The Ld. A.R. contended that the assessee has discharged its

primary onus casted upon it as per section 68 of the Act that the assessee has proved the

identity, creditworthiness of the parties and genuineness of the transactions. The Ld. A.R.

relied on various decisions in support of his contention. It was also the contention of Ld.

A.R. that notice u/s. 143(2) of the Act was not issued to the assessee by the Ld. AO.

8.

The Learned Departmental Representative (“Ld. D.R.” for short), on the other hand,

controverted the said fact and stated that these were not genuine transactions and are merely

IT(SS)A No.3120/Mum/2025 M/s. JS Infrastructure for providing accommodation entries in which the assessee is said to be one of the

beneficiaries of the said transactions. The Ld. D.R. further stated that the Ld. AO issued

notices u/s. 133(6) of the Act which were not served on such persons as not found in the

given address. With regard to the issue of “no incriminating material”, the Ld. D.R.

contended that even allegations found during investigation, specific information would

also amount to incriminating material. Further, with regard to the Ld. A.R.’s argument that

notice u/s 143(2) of the Act was not issued to the assessee, the Ld. D.R. relied on the finding

of the Ld. CIT(A) in holding that notice u/s 143(2) of the Act was not a mandatory

requirement for completing assessment u/s. 153A/153C of the Act. The Ld. D.R. relied on

the order of the lower authorities.

9.

We have heard the rival submissions and perused the materials available on record.

It is observed that the assessee has raised various contentions pertaining to “no

incriminating material” found during the search for which the Ld. A.R.’s contention was

the seized material was only the ledger account of the assessee which was part of the regular

books of account of the assessee firm. Pursuant to the search action in the case of Patel

RPL Realty Group, ledger accounts of various parties were seized which revealed

transactions that were already appearing in the assessee’s balance sheet. During the

assessment proceedings the assessee had furnished details of confirmation of accounts

along with bank entries for the impugned loan transaction along with details of repayment

made, sufficiently corroborated by documentary evidences. It is evident from the

assessment order as well as from the Ld. CIT(A)’s order that these documents were not

disputed by the lower authorities nor was it held to be non-genuine. Further, it is also

IT(SS)A No.3120/Mum/2025 M/s. JS Infrastructure observed that no discussion of the documentary evidences furnished by the assessee was

found in the order of the lower authorities. There is no iota of doubt that the assessee has

discharged the primary onus casted upon it u/s. 68 of the Act to establish the identity and

creditworthiness of the lenders and the genuineness of the transactions. This fact was also

not disputed by the Ld. D.R. during the appellate proceedings when confronted with. It is also the settled proposition of law by the Hon’ble Apex Court in the case of Abhisar Buildwell (P.) Ltd. (2023) 149 taxmann.com 399 (SC) that in respect of completed or

unabated assessment no addition can be made by the Ld. AO in the absence of any

incriminating material found during the course of search. In the present case in hand,

except for the ledger account of the assessee which was already forming part of the regular

books of account, no incriminating material was found during the search operation. From

the above observation, we deem it fit to hold that the assessee has furnished complete

details of the unsecured loan received and subsequently repaid through banking channels

which are appearing in the books of accounts of the parties, corroborated by bank

statements, financial statements, confirmation letters and details of return of income filed

by the parties. We are also conscious of the fact that no incriminating material pertaining

to the assessee was seized during the search in the case of M/s. Patel RPL Realty Group.

10.

On the above factual matrix, we deem it fit to hold that the impugned addition made

in the hands of the assessee ought to be deleted as there is no justification in making an

addition on the aforementioned facts of the case.

11.

Thus, the grounds of appeal raised by the assessee are hereby allowed.

IT(SS)A No.3120/Mum/2025 M/s. JS Infrastructure 12. In the result, the appeal filed by the assessee is hereby allowed.

Order pronounced in the open court on 23.12.2025

Sd Sd/-Sd/- Sd/-Sd/- (OMKARESHWAR CHIDARA) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai; Dated: 23.12.2025

* Kishore, Sr. P.S.

Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER,

(Dy./Asstt.Registrar) ITAT, Mumbai

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