GROVY INDIA LIMITED,DELHI vs. DCIT, CENTRAL CIRCLE-14, DELHI

ITA 2052/DEL/2026Status: DisposedITAT Delhi09 October 2026AY 2020-219 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed grounds 5 to 10 in favor of the assessee. It noted that the assessee had discharged the initial onus regarding the identity, source, and creditworthiness of the lender by providing documents like loan confirmation, ITR, bank statements, and PAN details. The lender, M/s Nandini Tradex Pvt. Ltd., also complied with the notice under Section 133(6). The loan was received through banking channels and recorded in the books of both parties. The AO did not point out any specific infirmity in the documentary evidence. Crucially, identical notices for AYs 2021-22 and 2022-23 were accepted by the AO without addition. Therefore, the Tribunal held that Section 68 was not applicable, and the addition made by the AO and confirmed by the CIT(A) was liable to be deleted. The Tribunal found that since the case was decided on merits in favor of the assessee, other grounds became academic and were left open. The appeal was partly allowed.

What were the facts?

The assessee, Grovy India Limited, is engaged in real estate development and financial market trading. For Assessment Year 2020-21, the assessee filed an original return declaring a loss, which was later revised to the same amount. The Assessing Officer (AO) initiated reassessment proceedings under Section 147 of the Income Tax Act, 1961, based on information from a search on Galaxy Group and entry providers. The AO alleged that M/s Nandini Tradex Pvt. Ltd., from whom the assessee received a loan of Rs. 1,00,00,000/-, was a non-descript company providing accommodation entries. The AO made an addition of Rs. 1,00,00,000/- under Section 68. The Commissioner of Income Tax (Appeals) upheld the AO's order. The assessee appealed to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the Assessing Officer validly assumed jurisdiction under Section 148 of the Income Tax Act, 1961, for the Assessment Year 2020-21, given the absence of material supporting undisclosed income or proper recording of satisfaction. (Assessee's contention: No material or evidence supported undisclosed income or proper satisfaction. Revenue's contention: Relied on the order of the authorities.) 2. Whether the Assessing Officer erred in making additions on account of alleged accommodation entries or credits from a shell entity, solely relying on an investigation report and treating vague information as sacrosanct, despite voluminous contrary evidence from the assessee. (Assessee's contention: AO relied on investigation report, ignored assessee's evidence, and did not provide cross-examination opportunity. Revenue's contention: Relied on the order of the authorities.) 3. Whether the Assessing Officer erred in sustaining the addition of Rs. 1,00,00,000/- under Section 68 of the Act as an unexplained cash credit, when the amount was an interest-bearing loan received from M/s Nandini Tradex Pvt. Ltd. and was repaid with interest in the subsequent year. (Assessee's contention: The amount was a genuine interest-bearing loan, repaid in the subsequent year, thus Section 68 is not applicable. Revenue's contention: Relied on the order of the authorities.) 4. Whether the Assessing Officer erred in charging a higher rate of tax under Section 115BBE of the Act on the addition made under Section 68. (Assessee's contention: Neither Section 68 nor Section 115BBE is applicable. Revenue's contention: Relied on the order of the authorities.)

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 68,Section 115BBE,Section 133(6),Section 139,Section 139(5),Section 143(2),Section 271AAC(1),Section 234B,Section 234C,Section 234D

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “B”, DELHI

Before: SH. M. BALAGANESHSH. SUDHIR KUMAR

Hearing: 12/08/2026Pronounced: 09/10/2026

PER SUDHIR KUMAR, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (appeals)-26 Delhi [hereinafter referred to as (“Ld. CIT(A)”] dated 13-01-2026 arising out the assessment order dated 20-02-2025 under section 147 of the Income Tax Act 1961 (in short “the Act”) pertaining to A.Y. 2020-21. 2. The assessee has raised the following grounds in the appeal:

1.

That on the facts and in the circumstances of the case Ld. CIT(A) has erred both on facts and in law in upholding the impugned order passed by the respondent illegally, violating the principal of natural

justice, without fair and objective application of mind to the facts of the case and the law applicable and wit

The order continues below.

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