DIPIKA POLYMERS PRIVATE LIMITED,NEW DELHI vs. DY. COMMISSIONER OF INCOME TAX, NEW DELHI

ITA 4827/DEL/2025Status: DisposedITAT Delhi09 October 2026AY 2016-1711 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the assessee's appeal. It noted that the issue was squarely covered by the decision of a co-ordinate bench in M/s South West Pinnacle Exploration Ltd. Vs. ACIT (ITA No. 3834/Del/2025, dated 21.01.2026). The Tribunal observed that in the present case, the assessee had repaid the loan amount of Rs. 1,50,00,000/- during the same assessment year, evidenced by bank statements. Specifically, Rs. 1,00,00,000/- was repaid on 26.02.2016, and the remaining Rs. 50,00,000/- on 08.03.2016. Interest of Rs. 11,08,200/- was paid on 17.03.2016. These facts, supported by documentary evidence, demonstrated that the case was covered by the cited precedent. The Tribunal held that the loan taken through banking channels and repaid with interest indicates genuine transactions. Therefore, the additions of Rs. 1,50,00,000/- under Section 68, and the consequential interest and commission additions under Section 69C, were deleted. The ratio decidendi is that if a loan is received and repaid through banking channels with interest, and the creditor has been found genuine in a prior adjudication, the addition under Section 68 is unjustified.

What were the facts?

The assessee, M/s Dipika Polymers Pvt. Ltd., is in appeal against the order of the CIT(A)-24, New Delhi, dated 09.06.2025. This order upheld the assessment order dated 28.12.2021 passed by the DCIT, Central Circle-6, New Delhi. The assessment for Assessment Year 2016-17 was completed under Section 153C read with Section 143(3) of the Income Tax Act, 1961. The Assessing Officer made an addition of Rs. 1,50,00,000/- on account of an unexplained credit in the form of an unsecured loan from M/s XO Infratech Pvt. Ltd. and an addition of Rs. 4,50,000/- for commission on accommodation entry. The assessee had filed its return of income on 13.10.2016, declaring a total income of Rs. 86,73,011/-. A search operation in the Ashish Begwani Group of cases on 22.10.2016 led to the issuance of a notice under Section 153C to the assessee.

What were the issues?

1. Whether the CIT(A) erred in sustaining the addition of Rs. 1,50,00,000/- under Section 68 and Rs. 4,50,000/- under Section 69C, made by the AO, based on untested and unconfronted statements of third parties without allowing an opportunity for cross-examination (Question of law and fact, turning on principles of natural justice and Section 68/69C). 2. Whether the CIT(A) erred in sustaining the addition of Rs. 1,50,00,000/- under Section 68 and Rs. 4,50,000/- under Section 69C, made by the AO, without considering the exhaustive documentary evidence filed by the appellant, including repayment of loans within the same financial year along with interest after TDS deduction, and accepting a self-contradictory view of accepting interest expenses without accepting the principal loan (Question of law and fact, turning on Section 68/69C and evidence appreciation). Assessee's Contention: The assessee argued that the issue is covered by the Delhi co-ordinate bench decision in ITA No. 3834/Del/2025, which held that M/s XO Infratech Pvt. Ltd. was a genuine creditor, and the loan was not an accommodation entry. The loan was received through banking channels and repaid with interest. The assessee relied on the finding that the creditor qualified on all aspects: identification, creditworthiness, and genuineness. Revenue's Contention: The Revenue relied on the orders of the lower authorities, arguing that the assessee must stand on its own legs and that the relied-upon case is distinguishable on facts. The Revenue offered no specific rebuttal regarding M/s XO Infratech Pvt. Ltd.'s role as a creditor.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C,Section 153C,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI

Before: Sh. S. Rifaur Rahman & Sh. Raj Kumar Chauhan

Hearing: 30.09.2026Pronounced: 09.10.2026

Per Raj Kumar Chauhan, Judicial Member:

The appeal of the assessee is directed against the order dated 09.06.2025 of ld. CIT(A)-24, New Delhi passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) wherein an addition of Rs.1,50,00,000/- u/s 68 of the Act on account of an unexplained credit received from M/s XO Infratech Pvt. Ltd. and addition of Rs.4,50,000/- u/s 69C on account of commission for accommodation entry have been confirmed and the assessment order dated 28.12.2021 has been upheld.

2.

Facts in brief as culled out from the orders of the authorities below are that the assessee filed its return of income for A.Y. 2016-17 declaring tota

The order continues below.

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