PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI- 10 vs. M/S. RADIUS INDUSTRIES

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ITA/182/2022HC DelhiDLHC01003527202004 July 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA2 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court held that it would not be justified in reversing the concurrent findings of fact recorded by the CIT(A) and the ITAT in a second appeal, especially when those findings suffer from no perversity. The Court noted that the CIT(A) and ITAT had examined the audited financial statements, return acknowledgements, lender confirmations, and bank statements of the lenders. They had concluded that the lenders were duly assessed to tax and had advanced unsecured loans through banking channels, a fact not rebutted in the assessment order. The authorities also found that the assessee had furnished complete details and evidence to discharge its burden regarding these unsecured loans. The Court relied on the principle that non-compliance with notices under Section 133(6) of the Act by all entities providing unsecured loans cannot be the sole basis for making additions under Section 68 of the Act. Therefore, the appeal was dismissed as devoid of merits.

What were the facts?

The appeal was filed by the Principal Commissioner of Income Tax, Delhi-10, against an order dated September 17, 2019, passed by the Income Tax Appellate Tribunal (ITAT) in ITA 7622/Del/2018 for Assessment Year 2015-16. The ITAT had dismissed the cross-appeal filed by the appellant. The appellant contended that the Commissioner of Income Tax (Appeal) [CIT(A)] and the ITAT erred in deleting additions of unsecured loans made by the Assessing Officer. These loans were advanced by Ms. Preetinder Kaur Bindra, M.S. Bindra and Company (HUF), Jiya Bindra, Amrik Singh Chawla, and J.B.L. Intervention Associates. The appellant argued that these lenders did not respond to notices under Section 133(6) of the Income Tax Act, 1961, and that the genuineness, creditworthiness, and identity of lenders require more than just documentation.

What were the issues?

1. Whether the deletion of additions of unsecured loans by the CIT(A) and ITAT was erroneous, considering the non-response of lenders to notices under Section 133(6) of the Income Tax Act, 1961? (Question of law and fact) Assessee's Contention (Revenue's Argument in this context): The revenue argued that the CIT(A) and ITAT erred in deleting the additions of unsecured loans. They contended that the lenders' non-response to Section 133(6) notices meant that genuineness, creditworthiness, and identity were not sufficiently established, requiring more than mere documentation. The revenue's argument was that the assessee failed to discharge the burden of proof. Revenue's Contention (Assessee's Argument in this context): The judgment does not record specific arguments made by the respondent (assessee) in this appeal. However, it notes that the CIT(A) and ITAT, after examining audited financial statements, return acknowledgements, lender confirmations, and bank statements, held that the lenders were assessed to tax, advanced loans through banking channels, and that the assessee had furnished complete details and evidence to discharge its burden.

Which sections of the Income-tax Act were involved?

Section 133(6),Section 68

AI-generated summary — verify with the full judgment below

$~S-15 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 182/2022 & CM APPLs.28829-28830/2022 PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI- 10 ..... Appellant Through: Mr.Shailendera Singh, Jr.Standing Counsel with Ms.Vibhooti Malhotra, Sr.Standing Counsel, Mr.Udit Sharma and Mr.Ekansh Dubey, Advocates. versus M/S. RADIUS INDUSTRIES ..... Respondent Through: None. CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA O R D E R % 04.07.2022 Present Income Tax Appeal has been filed challenging the Order dated 17th September, 2019 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA 7622/Del/2018 for the Assessment Year 2015-16 insofar as it dismissed the cross appeal filed by the appellant. Learned counsel for the Appellant states that the Commissioner of Income Tax (Appeal) [‘CIT(A)’] and ITAT erred in deleting the additions of unsecured loans made by the Assessing Officer qua loans advanced by Ms.Preetinder Kaur Bindra, M.S.Bindra and Company (HUF), Jiya Bindra, Amrik Singh Chawla and J.B.L. Intervention Associates, New Delhi. Learned counsel for the appellant states that there was no response from the aforesaid parties in response to notice under Section 133(6) of the Income Tax Act, 1961 (‘the Act’). He submits that genuineness, This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/06/2026 at 02:25:57

creditworthiness and identity of the lenders have to be established by much more than production of paper work/documentation. A perusal of the paperbook reveals that CIT(A) and ITAT after examining the copies of audited financial statement, acknowledgement of return of income, confirmation from lender, bank statement of lender have held that the lenders are entities duly assessed to tax and have made unsecured loans through banking channels, which fact has not been denied nor rebutted in the assessment order. CIT(A) and ITAT have also categorically held that the Assessee had furnished complete details and evidences to discharge the burden in respect of unsecured loans reflecting in the financial statement of the assessee-company. It is settled law that non-compliance of notices under Section 133(6) of the Act to all entities giving unsecured loans cannot be the sole basis to make additions under Section 68 of the Act. Consequently, this Court is of the view that it would not be justified in reversing in second appeal the concurrent finding of facts recorded by two authorities below, especially when the said findings suffer from no perversity. [See: Ram Kumar Aggarwal & Anr. Vs. Thawar Das (through LRs), (1999) 7 SCC 303 and State of Haryana & Ors. Vs. Khalsa Motor Limited & Ors., (1990) 4 SCC 659) Accordingly, the present appeal along with applications, being devoid of merits, is dismissed. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J JULY 4, 2022/TS This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 15/06/2026 at 02:25:57

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