ACIT-1(1), BHOPAL, BHOPAL vs. KAMAL NAYAN AGRAWAL, BETUL

आदेश / O R D E R

Per Arvind Soni, A.M.:

This appeal has been filed by the Revenue against the order dated 18.08.2025 passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as "the ld. CIT(A)"] for Assessment Year 2014-15 arising out of assessment order framed under section 147 read with section 144 of the Income-tax Act, 1961 ("the Act").

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18.11.2014 for A.Ys.2014-15 declaring total income of Rs.1,32,09,080/-. Subsequently the case was selected for complete scrutiny under section 143(3) of the Income Tax Act and Ld. AO made an addition of Rs.2,50,000/- assessed the total income of Rs.1,34,59,080/- on 29.12.2016. The case was reopened under section 147 and a notice under section 148 of the Act was issued on 31.03.2021 in response to the aforesaid notice ITR was filed on 23.07.2021 declaring total income of Rs.1,32,09,080/-. Ld. AO passed an order and made an addition of Rs.2,45,00,000/- u/s 68 of the Act and assessed income after addition was Rs.3,77,09,080/- on the basis of the information of the Investigation wing of the IT Department.

“1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.2,45,00,000 made by the AO under section 68 of the Income-tax Act, 1961 being unexplained cash credits, without properly appreciating and not even discussing the findings recorded by the Assessing Officer in the reassessment order dated 30.03.2022 and by merely quoting the submissions of the assessee and limiting his entire discussion and decision effectively to mere one para (para 6.4) of his order and hence his order is a non-speaking and unjustified order 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has grievously erred in: (a) failing to appreciate that

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the assessee had not discharged the onus cast upon him under section 68 of the Act to prove the identity, creditworthiness, and genuineness of the unsecured loans claimed to have been received from M/s East West Finvest Pvt. Ltd. and M/s Jay Jyoti India Pvt. Ltd. (now M/s Jayganga Exim Pvt. Ltd.) (b) relying on documents (without discussing/justifying even briefly) such as bank statements, ITR acknowledgments and confirmations filed by the assessee without independent verification and has overlooked the fact that such documents were part of a pre- determined accommodation entry mechanism as brought out by the investigation Wing of department (c) failing to appreciate that both lender companies lacked genuine financial capacity OR any commercial rationale to advance large sums to the assessee, and that their financial statements themselves 3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has grievously erred in completely ignoring: (a) the categorical and detailed findings of the Investigation Wing, which established that the said lender companies were shell entities controlled by Shri Sharad Darak, a well-known accommodation entry operator, and that the impugned loan transactions were not genuine but mere accommodation entries and in whose own and in several 3 connected cases (Annexure A attached separately) the appellate authorities have decided the same issues in favour of Revenue (b) the fact that Shri Sharad Darak himself in his statement before the Investigation Wing has accepted that he had received cash from various entities and transferred the amount via shell companies to various entities through RTGS/Banking channel including the assessee (c) That his order declaring the transactions genuine contrary to the statement of Shri Sharad Darak admitting that he has provided a 4. That the order of the Ld. CIT(A) is contrary to law, facts, and the judicial precedent laid down in the several case laws, including in Bikram Singh 2017 85 taxmann.com 104 (Delhi) and in Maithan International 2015 56 taxmann.com 283 (Calcutta), wherein it was held that mere identification of lenders and payments through banking channels do not establish genuineness of loan transactions WHARE lenders lack financial capacity OR business justification 5. Whether on the facts and circumstances of the case and in law, the findings given by the Ld. CIT(A) which deleted the additions, suffers from perversity as it failed to allude to relevant facts, misread the evidence and its probative value and the legal position in view of ratio of decisions in several cases including in the case of Sudarshan Silk and Sarees 300 ITR 205 (SC).”

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5. Since all the above said grounds of appeal raised by the revenue are interconnected and same from common facts and issues, we deem it appropriate to take up all the grounds together for the sake of convenience and adjudicate them collectively.

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Sharad Darak and found that Mr. Darak is a common director and admitted the transaction of providing accommodation entries through the bogus concerns. Based on the material available with the AO it was concluded that these loan creditors are nothing but paper companies providing accommodation entries. The AO accordingly made the addition of Rs.2,45,00,000/- as unexplained credit.

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11. He has further submitted that the additions made by the Ld. AO in case of Sharad Doshi Group, Shri Girish Tayal and Shri Sanjay Shukla have already been deleted by the Ld. CIT(A) as well as by this Tribunal similar additions were also made by the Ld. AO on the basis of the statement of Shri Sharad Darak but subsequently deleted by the CIT(A) and on further appeal this tribunal has confirmed the order of the Ld. CIT(A). He has relied upon the decision of this Tribunal in case of Shri Sanjay Shukla in ITANo.333/Ind/2020 & ITANo.49/Ind/2021 dated 15.03.3022 and ACIT vs. Shri Akash Shukla in ITANo.43/Ind/2022.

“6.0 CIT's Decision: 6.1 The grounds of appeal, assessment order, submissions of the appellant have been carefully considered and adjudicated as under: 6.2 Grounds 1 to 5: The appellant had objected that no proper opportunity was provided to represent the case and reopening was bad in law.

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The Hon'ble Supreme Court in Assistant Commissioner of Income Tax Vs. Rajesh Jhaveri Stock Brokers Private Limited reported in (2008)14 SCC 208. The Hon'ble Supreme Court held that Section 147 authorises and permits the assessing officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. It was further pointed 6 out that the word "reason" in the phrase "reason to believe" would mean cause or justification; if the assessing officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. It was further held that the expression cannot be read to mean that the assessing officer should have finally ascertained the fact by legal evidence or conclusion and that the function of the assessing officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. In the case of Central Provinces Manganese Ore Co. Ltd. Vs. ITO reported in (1991) 4 SCC 166 and it was held that at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. Further, at the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief, whether the materials would conclusively prove the escapement is not the concern at that stage since the formation of belief by the assessing officer is within the realm of subjective satisfaction. It was further held so long as the ingredients of Section 147 are fulfilled, the assessing officer is free to initiate proceeding under Section 147 and failure to take steps under Section 143(3) will not render the assessing officer powerless to initiate reassessment proceedings even when intimation under Section 143(1) had been issued. It is ascertained that the Assessing Officer has followed the required procedures and passed a valid order. Hence these grounds are rejected. 6.3 Ground 6: The appellant had stated that addition of Rs.2,45,00,000 and levying tax under section 115BBE is unjustified, unwarranted and bad in law. The grounds and the submissions have been examined. The appellant submitted Bank Statements, Income Tax Returns and Ledger Confirmations from both East West Finvest Private Limited and Jay Jyoti India Private Limited to prove the identity, creditworthiness and genuineness of the loans of Rs.2,45,00,000 advanced by these companies to the appellant. It is ascertained that, as on 31.03.2013, the net worth of East West Finvest Pvt. Ltd. stood at Rs. 135.97 crores and

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the net worth of Jay Jyoti India Pvt. Ltd. (Now: Jayganga Exim India Pvt. Ltd.) stood at Rs. 114.96 crores. The appellant has stated that the name of Jay Jyoti India Pvt. Ltd was changed to Jayganga Exim India Private Limited vide Resolution dated 30th Day of July 2014 and also as per MGT14 filed with Registrar of Companies. The argument that the ledger confirmation provided by the lender Jay Jyoti India Private Limited (Now: Jayganga Exim India Pvt. Ltd.) by affixing stamp of Jaiganga Exim Private Limited is found to be acceptable. After considering the submissions, the issue is decided as under: The addition has been made under section 68 and the same is reproduced below: Section 68: Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such aassessee -company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:

Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10. 6.4 In the facts of the present case, the furnishing of name, PAN particulars and confirmations from the loan creditors proves their identity. the transactions having been routed through banks proves the

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genuineness of the transactions and furnishing of relevant extract of the bank statement of the loan creditors and copies of their computation of income and return acknowledgments proves the creditworthiness of the loan creditors. Thus both the nature & source of the creditors and the credits received was fully explained by the appellant. The appellant had discharged its onus to prove the identity, creditworthiness and genuineness of the share applicants. Accordingly, all the three conditions as required u/s. 68 of the Act i.e. the identity, creditworthiness and genuineness of the transaction was placed before the AO and the onus shifted to AO to disprove the materials placed before him. As the appellant has discharged his onus the appeal filed is hereby allowed in favour of the appellant. 7.0 As a result, the appeal of the appellant is allowed.”

“6. We have considered the rival submission and relevant material on record. The Assessing Officer has made the addition on the basis of the statement recorded by the investigation wing of the department of one Shri Sharad Dharak in some other cases of search. Apart from the statement, the AO has not brought on record any material to show that these loans transactions are nothing but assessee’s own undisclosed income routing back through these loan creditors in the garb of unsecured loans. The Ld. CIT(A) has decided this issue in para 3.3.2 to 3.4 as under: 3.3.2 I have duly considered the above and found that the Ld. AO has concluded that the above unsecured loans had been received from the Companies controlled by Shri Sharad Darak who is a well known accommodation entry provider of Indore. The Ld. AO on the basis of findings of past actions of the various officers held that Shri Sharad Darak runs dummy companies through which he provides entries to needy persons. The Ld. AO has also relied upon statement of Shri Sanjay Shukla, father of the appellant, statement of Shri Sharad Darak, director of M/s Jayant Securities and Finance and M/s Jay Jyoti India Pvt Ltd. On perusal of assessment order, it has been found that the Ld. AO has not made any independent enquiry to disprove the identity, creditworthiness, genuineness of transaction. The Ld. AO has also not enquired into the nature and source of unsecured loans. The Ld. AO has only given emphasis on some enquiries conducted in the past and given a general findings and made additions. No specific finding about the companies proving the transactions done in the year under consideration bogus, has been given in the assessment order. The Ld. AO has also relied upon the statement u/s.131(1A) dated 14.03.2014 of Shri Sanjay Shukla, authorized speaker for the appellant and statement u/s.131(1) dated 15.03.2016 of Shri Sharad Darak and facts gathered in the case of Shri Girish Tayal. Sendhwa. These third party statement cannot be sole reason for the addition in the total income of the appellant. The appellant has filed ample information and documents to discharge its onus as envisaged in section 68 of the Act. It has been found that all loans had been received by the appellant from the companies under consideration through proper banking channel and the appellant has paid interest thereon after deducting TDS. Repayment of loans have been done and interest thereon has been paid and due TDS has also been made. The appellant has also shown interest received from M/s. Amrit Realty and M/s. MSD Developers as income in his return of income and paid due taxes on it. Major part of such loans has been repaid with interest. All transactions are done through banking channel. No investigation has been conducted to discredit such information or documents. The position of Share Capital, reserve and surplus and cash and balances of these companies as per audited balance sheet is as under:

Name of the F.Y Share capital as Reserve and Cash and cash Company on 31 March surplus Inter equivalent/bank corporate as on 31st march deposits/ Share application money as on 31ST March

Jayant Security 2012-13 2.84,18,000 146,70,45,808/- 13.45.225/ And Finance Ltd.

M/s. Jay Jyoti 2012-13 6,33,50,500/- 159,85,35,646/- 2,34,88,273

M/s Octagon 2012-13 25,13,000/- 6,85,59,352/- 25,423/- Media Matrix P. Ltd.

Trimurthi 2013-14 12,78,77,500/- 1,61,71,26,058/- 2,10,42,648/- Finvest Ltd Regarding M/s. Somani Madhusudan Sawalram, HUF. amount of Rs.5,00,000/- has been given to the appellant out of bank balance. Further, the appellant has repaid the amount of Rs.7.47.287/- including interest on 26.12.2017. On perusal of the above, it is evident that the lender company/person had substantial funds available with it to advance money to the appellant. The appellant has also filed necessary documents to prove its identity, creditworthiness of these companies and also filed bank statement reflecting the transactions. In my opinion, nothing in form of cogent evidences has been brought on record by the Id. AO in support of his findings. The ld. A.O should have acted on the details furnished by the appellant, but he did not do so. Hon'ble Delhi High Court in the case of Oasis Hospitalities P. Ltd. reported in 333 ITR 119(2011) has held as under: "11. It is clear from the above that the initial burden is upon the assessee to explain the nature and source of the share application money received by the assessee. In order to discharge this burden, the assessee is required to prove: (a) Identity of shareholder: (b) Genuineness of transaction; and (c) Creditworthiness of shareholders. 12. In case the investor/shareholder is an individual, some documents will have to be filed or the said shareholder will have to be produced before the AO to prove his identity. If the creditor/subscriber is a company, then the details in the form of registered address or PAN identity, etc. can be furnished. 13. Genuineness of the transaction is to be demonstrated by showing that the assessee had, in fact, received money from the said shareholder and it came from the coffers from that very shareholder. The Division Bench held that when the money is received by cheque and is transmitted through banking or other indisputable channels, genuineness of transaction would be proved. Other documents showing the genuineness of transaction could be the copies of the shareholders register, share application forms, share transfer register, etc. 14. As far as creditworthiness or financial strength of the creditor/ subscriber is concerned, that can be proved by producing the bank statements of the creditors/subscribers showing that it had sufficient balance in its accounts to enable it to subscribe to the share capital. This judgment further holds that once these documents are produced, the assessee would have satisfactorily discharged the onus cast upon him. Thereafter, it is for the AO to scrutinize the same and in case he nurtures any doubt about the veracity of these documents to probe the matter further. However, to discredit the documents produced by the assessee on the aforesaid aspects, there has to be some cogent reasons and materials for the AO and he cannot go into the realm of suspicion. Considering the above decision, the appellant had discharged its onus by producing ample evidences. Without any investigation and cogent material, Id. AO treated the same as unexplained which is not sustainable in view of following judgments: (i). Divine Leasing & Finane Ltd. (2008) 299 ITR 268(Delhi). wherein it was held that: "16. In this analysis, a distillation of the precedents yields the following propositions of law in the context of s. 68 of the IT Act. The assessee has to prima facie prove (1) the identity of the creditor/subscriber: 2) the genuineness of the transaction, namely, whether it has been transmitted through banking or other indisputable channels; (3) the creditworthiness or financial strength of the creditor/subscriber: (4) if relevant details of the address or PAN identity of the creditor/subscriber are furnished to the Department along with copies of the shareholders register, share application forms, share transfer register, etc. it would constitute acceptable proof or acceptable explanation by the assessee: (5) the Department would not be justified in drawing an adverse inference only because the creditor/subscriber fails or neglects to respond to its notices; (6) the onus would not stand discharged if the creditor/subscriber denies or repudiates the transaction set up by the assessee nor should the AO take such repudiation at face value and construe it, without more, against the assessee; (7) the AO is duty bound to investigate the creditworthiness of the creditor/ subscriber, the genuineness of the transaction and the veracity of the repudiation. (ii). CIT v. Kamdhenu Steel & Alloys Limited and Other (2014) 361 ITR 220(Delhi) wherein it is held that: "38 Even in that instant case, it is projected by the Revenue that the Directorate of Income Tax (Investigation) had purportedly found such a racket of floating bogus companies with sole purpose of lending entries. But, it is unfortunate that all this exercise if going in vain as few more steps which should have been taken by the Revenue in order to find out causal connection between the case deposited in the bank accounts of the applicant banks and the assessee were not taken. It is necessary to link the assessee with the source when that link is missing, it is difficult to fasten the assessee with such a liability (iii). The decision of Hon'ble Apex Court in the case of NRA Iron & Steel Pvt. Ltd. (Arising out of SLP (Civil) No. 29855 of 2018) order dated 05.03.2019. the relevant paras of which are reproduced hereunder:

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9. The Judgments cited hold that the Assessing Officer ought to conduct an independent enquiry to verify the genuineness of the credit entries. In the present case, the Assessing Officer made an independent and detailed enquiry, including survey of the so-called investor companies from Mumbai, Kolkata and Guwahati to verify the credit-worthiness of the parties, the source of funds invested, and the genuineness of the transactions. The field reports revealed that the share-holders were either non-existent, or lacked credit-worthiness." 11. The principles which emerge where sums of money are credited as Share Capital/Premium are:Assessee is under a legal obligation to prove the genuineness of the unson, the identity of the creditors, and credit-worthiness of theInvestors who should have the financial capacity to make the investment in question, to the satisfaction of the 40, as to discharge the primary onus. The Assessing Officer is duty band to investigate the creditworthiness of the creditor subscriber, verify the identity of the subscribers, and ascertain whether the transaction is genuine, or these are bogus entries of name-lenders If the enquiries and investigations reveal that the identity of the creditors to be dubious or doubtful, or lack credit- worthiness, then the genuineness of the transaction would not be established. In such a case, the assessee would not have discharged the primary on contemplated by Section 68 of the Act. 12. In the present case, the A.0. had conducted detailed enquiry which revealed that There was no material on record to prove, or even remotely suggest, that the share application money was received from independent legal entities. The survey revealed that some of the Investor companies were non- existent, and had no office at the address mentioned by the assessee In view of the above judicial pronouncements, the AO is duty bound to investigate the issue once the assessee discharges its onus as per section 68 of the Act. Here, such efforts are absent. Further, the appellant has brought on record the decision of Hon'ble ITAT Indore in the case of Shri Pramod Kumar Sethi (ITA NO. 382 and 383/Ind/2014, dated 06.11.2018) wherein various companies of Sharad Darak Group held as genuine companies In another decision in the case of M/s. Radhishwari Developers Pvt. Ltd. (ITA No. 493/Ind/2018 dated 20.07.2021) Hon'ble ITAT Indore has held that M/s. Jayant Securities and Finance Ltd. is regularly assessed to tax for last many years and scrutiny proceedings u/s.143(3) of the Act were completed in this company. This company is regularly filing appeal before the judicial forums which show that this company is not a dummy company. Considering the above findings of the Hon'ble ITAT, above companies cannot be declared as dummy company. I find that the said companies

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are regularly assessed with tax and they also filing appeals at different forums. Thus, identity, creditworthiness, genuineness of transactions can not be doubted here. The appellant has also brought on record following decisions wherein Ms. Jayant Securities and Finance Ltd. has been treated as a genuine entity

Sr. Judicial Tribunal Citation No. Pronouncements

1 Radhishwari ITAT Indore ITA No.493/Ind/2018 Developers P. Lad

ITAT Indore 2 M's Admamum ITA No.331/Ind/2018 Finance Ltd.

ITAT Indore 3 Tirupen ITA No. 522/Ind/2014 Construction

ITAT Indore 4 KK Patel Finance ITA No.440/led/2010 Ltd

5 Jayant Security & ITAT, Ahmedabad ITA No.753/Ahd/2012 Finance Ltd

Regarding M/s. Jay Jyoti (India) Pvt. Ltd, the appellant has submitted following decisions wherein it has been held that the unsecured loans advanced by Jay Jyoti India Pvt. Ltd. was genuine

(1. Decision of Hon'ble ITAT Indore in the case of M/s. Radhishwari Developers Pvt. Ltd. (supra) for A.Y 2013-14

(ii). The CIT(A)-III, Indore in the case of Hilink City homes Pvt. Ltd. (Appeal No.IT-151/15-16 order Dated 26.08.20)

iii. The CIT(A)-III. Indore in the case of Sanjay Shukla for A.Y2013-14 (IT-10340/16-17dated 22.09.2020)

Regarding M/s. Trimurthi Finvest Ltd, the appellant has submitted following Judicial Pronouncements wherein it has been held that the unsecured loans advanced by M/s. Trimurthi Finvest Ltd. was genuine.

Sr. Judicial Pronouncements Tribunal Citation No.

1 Pramod Kumar Sethi ITAT, Indore ITANo.382 & 383/Ind/14 ITAT, Indore 2 Girish Kumar Sharda ITANos.30 to 33/Ind/2012 ITAT, Indore 3 Modern Laboraties ITANo.277 & CO 16/Ind/2014

3.3.3 In view of the above discussion, the detailed submissions made by the appellant and various binding decisions of jurisdictional ITAT, it is not justified to held the lender companies as dummy entities and the loans given to the appellant by these companies are non-genuine. Therefore, the additions made by the ld. AO are not sustainable. 3.3.4 In view of discussion made in para 3.2 to 3.3.3 above, addition of Rs.4,50,00,000/- in A.Y. 2013-14 and Rs.75,00,000/- in A.Y. 2014-15 on account of unexplained cash credit u/s. 68 of the Act are hereby deleted. Therefore, appeal on this ground is allowed. 3.4 Ground No. 2 of A.Ys. 2013-14 & 2014-15:- Through these grounds appeal, the appellant has challenged the addition made on account of interest paid on unsecured loans amounting to Rs.4,50,00,000/- in A.Y. 2013-14 and Rs.75,00,000/- in A.Y. 2014-15. In view of discussion made in para 3.2 & 3.3 above, additions of interest expenses being paid for the above amount of unsecured loans amounting to Rs. 31.61.774/- in AY 2013-14 and Rs. 20,72,666/- in AY 2014-15 are also not sustainable and hence, the same are deleted. Therefore, appeal on this ground is allowed. 7. We further note that this tribunal in the case of the father of the assessee Shri Sanjay Shukla vs. ACIT (Supra) has considered the identical issue of unsecured loans as under: 12.3 We have heard rival contentions, perused the records placed before us. Through ground No.1 revenue has challenged the finding of Ld. CIT(A) deleting the addition of Rs. 3,86,23,218/- made for unexplained unsecured loan and interest paid thereon taken from following parties: S. Name of Party Loan Received during Interest paid on the No. the year loan amount

1 Jayant Securities and Finance Rs.1,25,00,000 Rs.8,79,041/- Ltd. Vadodara 2 Jay Jyoti India Pvt. Ltd. Mumbai Rs.1,25,00,000 Rs.8,69,794/-

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3 Manas Realtors Pvt. Ltd. New Rs.50,00,000 Rs.3,41,507/- Delhi 4 Shri Sushil Kumar Ratan Lal Rs.50,00,000 Rs.3,32,876/- Khowal, Akola 5 Chandumal Govindram, Indore Rs.12,00,000 ----

Total Rs.3,62,00,000 Rs.24,23,218/-

12.4 We find that Ld. CIT(A) has dealt with this issue elaborately taking note of all the relevant documents filed by the assessee and the settled judicial precedence on the issue of unexplained unsecured loan of Rs.445 laksh and interest paid thereon Rs.29,82,575/- and Ld. CIT(A) has partly allowed assessee’s ground by sustaining the addition only with regard to loan taken from M/s KCL Infra Projects Private Limited at Rs.83 laks and interest paid thereon at Rs.5,59,357/- and deleting the remaining addition as observed in the finding given in para 4 to 11 at page no.13 to 56 of the impugned order. 12.5. As regards the loan taken from Jayant Security and Finance Ltd. Badodara at Rs. 1.25 crores and interest paid thereon at Rs.8,79,041/- , we find that the alleged cash creditor is a limited company, Permanent Account No. and address has been provided. Loan taken through proper banking channel Confirmation of account is on record. Jayant Security and Finance Ltd. is a non-banking financial company having experience of 26 years. This company is regularly assessed to tax and has also been subjected to scrutiny assessment and the additions made thereon have traveled before Coordinate Bench Ahmedabad in the case of M/s. Jayant Security and Finance Ltd. in ITANo.753/Ahd/2012. We also find that the loan taken from alleged company has been treated as genuine and the additions made in the hands of other loan receivers have been deleted by this Tribunal in the case of M/s Tirupati Construction ITANo.533/Ind/2014 and M/s K.K. Patel Finance Ltd. ITANo.440/Ind/2010. We, therefore, find no reason to doubt the genuineness and creditworthiness of Jayant Security and Finance Ltd. and identity is well proved which has been rightly appreciated by Ld. CIT(A) in order to delete the addition made u/s 68 of the Act at Rs.1.25 cr and interest disallowance at Rs.8,79,041/-. 12.6. As regards the cash creditor namely M/s Jay Jyoti India Pvt. Ltd. Mumbai we find that this company was incorporated in 1999. As on 31.03.2013 it had share capital of Rs. 6,33,50,500/- and net reserves and surplus of Rs.1,08,62,25,646/-. Bank statement, confirmation of account, ledger statement, audited financial statement, Memorandum of Association and tax deducted at source certificate are placed on record which in totality are sufficient to prove identity of this company, genuineness of the transaction and creditworthiness of this company It is further proved with the fact that it had merely advanced 0.75% of the funds which it was capable of i.e. it had financial capacity of advancing 133 times more than the loan given to the assessee company. Thus, Ld.

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CIT(A) has rightly appreciated these facts for deleting addition for made u/s 68 of the Act as well as the interest disallowance. 12.7. As regards unsecured loan of Rs.50 lakhs taken from Manas Realtors Pvt. Ltd. and Rs. 50 lakhs Shri Sushil Kumar Ratanlal Khowal from perusal of the documentary evidences filed by the assessee, we notice that Manas Realtors Pvt. Ltd. is stated to be a Real Estate Consultant Company and genuine loan has been advanced to the assessee company. Similarly Shri Sushil Kumar Ratanlal Khowal is also regularly assessed to tax and has declared income of Rs.6.49 crores for the year under appeal which in itself is sufficient to explain the source of loan of Rs.50 lakhs given to assessee. Even the case of Shri Sushil Kumar Ratanlal Khowal has reached before the Coordinate Bench Nagpur in ITANo. 463/NAG/2013 dated 25.03.2019 wherein appeal of the revenue was dismissed. We therefore, find no infirmity in the finding of Ld. CIT(A) deleting addition made for loan taken from Manas Realtors Pvt. Ltd at Rs.50 lakhs and shri Sushil Kumar Ratanlal Khowal at Rs.50 lakhs and also deleting the disallowance of interest paid at Rs.7,41,507/- and Rs.3,32,876/- respectively. 12.8. Lastly as regards Rs.12 lakhs taken from Chandoomal Govindram Indore we find that it is a partnership firm and book profit for the relevant assessment year is Rs.14,31,429/-. This firm is regularly assessed to tax and in its own case the issue of addition made by the Ld. AO reached to this Tribunal in ITANo.862/Ind/1999 dated 24.04.2006 wherein this tribunal dismissed the revenue’s appeal. Thus, looking to the fact that this partnership firm regularly assessed to tax, bank statement has been filed, confirmation account duly signed leaves no room for Ld. AO for making addition u/s 68 of the Act and thus rightly deleted by the Ld. CIT(A). 12.9. We also find merit in the finding of Ld. CIT(A) referring to various decisions including decision of this Tribunal in the case of Sumati Kumar KasliwaL & OTHERS ITANo.181, 472/Ind/2017 and others. Judgment of Hon'ble jurisdictional High Court in the case of Pr. CIT vs. M/s Chain House International (P) Ltd. ITANo.111/2018 dated 07.08.2018 and also decision of this Tribunal in the case of M/s Tirupati Consturction (supra) and M/s K.K. Patel Finance Ltd. (supra) wherein similar issue and almost identical facts has been examined and decided in favour of the assessee and additions made u/s 68 of the Act were deleted. We, therefore, find no infirmity in the finding of Ld. CIT(A) deleting the addition for unexplained loan and interest paid thereon at Rs.3,86,23,218/-. Thus ground no.1 raised by the revenue is dismissed. 8. Accordingly in the facts and in the circumstances of the case and following the decision of this Tribunal in the case of father of the assesse, we do not find any error or illegality in the impugned order of CIT(A) qua this issue.

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9. In the result, appeal of revenue is dismissed.

Order pronounced in open court on 30/10/2026

Sd/- Sd/-

(PARESH M.JOSHI) (ARVIND SONI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक /Dated : 30/10/2026 Patel/Sr. PS

Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative Akhilesh Kumar Digitally signed by Akhilesh Kumar (6) Guard File Date: 2026.11.02 17:50:14 +05'30' By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore

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