THE STOCK & BOND TRADING COMPANY,MAHARASHTRA vs. DCIT, CIRCLE 4(2)(1), MUMBAI, MUMBAI

ITA 3339/MUM/2026Status: DisposedITAT Mumbai13 October 2026AY 2013-1413 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had discharged its primary onus under Section 68 by submitting almost all primary details for all lenders, including identity particulars, loan account confirmations, and bank statements evidencing transactions through banking channels. The identity of lenders was not doubted by the AO, and the transactions were done through banking channels, with loans also being repaid. The Tribunal found that the AO did not make any independent inquiry to cross-verify the assessee's contentions, even in remand proceedings. The Tribunal noted that the CIT(A) failed to adjudicate the issue judiciously, solely relying on the remand report and not appreciating that the amounts were repaid. The Tribunal concluded that the CIT(A) was not justified in upholding the addition of Rs. 2.06 crore. Consequently, the appellate order was set aside, and the AO was directed to delete the impugned addition.

What were the facts?

The assessee, The Stock and Bond Trading Company, engaged in share and derivatives trading, filed a return declaring Nil income for Assessment Year 2013-14. The Assessing Officer (AO) completed the assessment under Section 143(3) and made an addition of Rs. 2.92 crore under Section 68 on account of unsecured loans. The assessee appealed to the Commissioner of Income-tax (Appeals) [CIT(A)]. In the first round, the matter was remanded by the ITAT to the CIT(A) for a finding on additional evidence. The CIT(A), after calling for a remand report, confirmed an addition of Rs. 2.07 crore, granting partial relief. The present appeal is by the assessee against the CIT(A)'s order.

What were the issues?

1. Whether the order passed by the learned CIT(A) under Section 250 of the Income-tax Act, 1961, is bad in law and deserves to be cancelled for not considering the facts and responses filed by the appellant (mixed question of law and fact). 2. Whether the learned CIT(A) erred in confirming the addition of Rs. 2,06,70,000/- under Section 68 of the Income-tax Act, 1961, despite the appellant furnishing all evidences to substantiate its loan transactions (question of law). Assessee's Contentions: The assessee argued that it had furnished all primary documentary evidence, including PAN/AO details, confirmations, ledger accounts, and bank statements of lenders and the assessee, proving the identity of lenders and genuineness of transactions. The loans were repaid through banking channels. The assessee contended that the onus to prove the source of source is mandatory only from AY 2023-24. They relied on cases like Orissa Corporation, CIT vs. Lovely Exports Pvt. Ltd., M/s. Confiance Trading Pvt. Ltd., CIT vs. Ayachi Chandrasekhar Narsangji, and Surender Singh Sangwan v. ITO. The assessee claimed to have discharged its initial legal burden under Section 68. Revenue's Contentions: The Revenue relied on the appellate order. However, the learned DR requested a remand to the AO for necessary inquiries to examine the creditworthiness of the lenders, suggesting the assessee submit tax details and financials of the lenders.

Which sections of the Income-tax Act were involved?

Section 68,Section 250,Section 143(3)

AI-generated summary — verify with the full judgment below

Before: SHRI SIDDHARTHA NAUTIYAL & SHRI PRABHASH SHANKAR

For Appellant: Shri Dhrunal Bhatt, AR
For Respondent: Shri Basavaraj Hiremath, CIT DR a/w, Shri Rajgopal Parthasarthy, Sr. DR
Hearing: 24.09.2026Pronounced: 13.10.2026

PER PRABHASH SHANKAR [A.M.] :- The instant appeal arising from the appellate order dated 27.01.2026 is preferred by the Assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 143(3) of the Income-tax Act, 1961

P a g e | 2 A.Y. 2013-14 The Stock and Bond Trading Company [hereinafter referred to as “Act”] dated 26.02.2016 for the Assessment Year

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 →

Latest GST High Court judgments

Search GST case law →