GAJANAN PAPER MILLS (P) LTD,BULDHANA, MAHARASHTRA vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7(1)(1), MUMBAI, AAYAKAR BHAWAN MUMBAI, MAHARASHTRA

ITA 7115/MUM/2026Status: DisposedITAT Bangalore25 September 2026AY 2016-175 pages
AI SummaryRemanded

What were the facts?

The assessee, Gajanan Paper Mills (P) Ltd., filed its return for Assessment Year 2016-17 declaring a loss. The Assessing Officer (AO) selected the case for scrutiny and noted unsecured loans of ₹78,63,119/- from five parties. The AO treated these as unexplained cash credits under Section 68 of the Income Tax Act, 1961, due to non-compliance by the assessee. The assessee appealed to the National Faceless Appeal Centre (NFAC)/CIT(A), which also dismissed the appeal for lack of compliance. The assessee then filed an appeal before the ITAT, Mumbai, with a delay of 260 days, citing reasons related to Corporate Insolvency Resolution Process (CIRP) and the appointment of a Resolution Professional. The ITAT condoned the delay.

What did the Tribunal hold?

The Tribunal condoned the delay of 260 days in filing the appeal, citing the assessee's undergoing of Corporate Insolvency Resolution Process and the appointment of a Resolution Professional. The Tribunal noted that both assessment and first appellate proceedings were concluded without complete supporting evidence from the assessee. Considering the subsequent developments under the Insolvency and Bankruptcy Code and the appointment of the Resolution Professional, the Tribunal, in the interest of justice, set aside the impugned order of the CIT(Appeals). The matter was restored to the file of the Assessing Officer for de novo consideration. The assessee, through the Resolution Professional, was directed to furnish all relevant evidence, including confirmations, bank statements, and income-tax particulars, to establish the identity, creditworthiness of lenders, and genuineness of transactions. The AO was instructed to examine the evidence afresh and decide the issue in accordance with the law after providing a reasonable opportunity of hearing to the assessee. The appeal was allowed for statistical purposes.

What were the issues?

1. Whether the addition of ₹78,63,119/- on account of unsecured loans, treated as unexplained cash credits under Section 68 read with Section 115BBE of the Income Tax Act, 1961, was justified? The assessee contended that the CIT(A) erred in upholding the addition. The revenue, through the AO and CIT(A), argued that the assessee failed to establish the identity, creditworthiness, and genuineness of the unsecured loans, leading to the addition under Section 68. The assessee's grounds of appeal focused on the addition made by the AO and upheld by the CIT(A). The revenue's position was based on the assessee's lack of evidence. 2. Whether the delay of 260 days in filing the appeal should be condoned? The assessee argued that the delay was due to CIRP and operational difficulties, with the Resolution Professional taking charge and then filing the appeal. The revenue did not explicitly argue against condonation in the provided text, but the Tribunal considered the assessee's explanation.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 244A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI SIDDHARTHA NAUTIYAL & SHRI PRABHASH SHANKAR

For Appellant: Shri Chetan Agarwal, Shri Basavaraj Hiremath, CIT DR
For Respondent: Shri Rajgopal Parthasarathi, Sr

PER SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:

This appeal is filed by the Assessee against the order of Ld. NATIONAL FACELESS APPEAL CENTRE(NFAC) / L. CIT(A) dated 16-07-2026 for the Assessment Year 2016-17. The Assessee has raised the following grounds of appeal:

1.

The Ld. CIT(A) has erred both in law and on facts in upholding the addition of Rs. 78,63,119/- made by the Ld. AO on account of unsecured loans received from various persons by treating the same as unexplai

The order continues below.

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