INCOME TAX OFFICER -5(3)(1), MUMBAI, MUMBAI vs. VERVE INDUSTRIES PRIVATE LIMITED, MUMBAI

Assessee by : Shri Mehul Tarela, A/R Revenue by : Shri Vivek Perampurna, CIT D/R सुनवाई की तारीख/Date of Hearing : 31/07/2025 घोषणा की तारीख /Date of Pronouncement: 07/08/2025 आदेश/O R D E R

PER NARENDRA KUMAR BILLAIYA, AM:

4. The appellant prays that the order of the CIT(A) on the grounds be set aside and confirm the order of the AO.

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3. Briefly stated the facts of the case are that the assessee filed its return of income on 31/12/2022 declaring total income at Rs. 12,56,59,590/-. The assessee engaged in the business of coal trading, handling and disposal of flyash and related activities. The return was selected for complete scrutiny under CASS and accordingly statutory notices were issued and served upon the assessee. While scrutinizing the return of income interalia, the AO noticed that the assessee has taken loan of Rs. 21.61 Crores from DN Energy Private Limited. Assessee was asked to furnish the details in the light of the provisions of Section 68 of the Act. The assessee in response furnished financials of DN Energy Private Limited from which the AO came to the conclusion that the said company does not have sufficient sources to give the loan to the assessee. The AO issued notice u/s 133(6) of the Act calling for information from DN Energy Private Limited in response to which the company submitted its audited financials for three assessment years along with bank statement marking the entry of transactions with the assessee. The AO was of opinion that the DN Energy Private Limited had no creditworthiness for providing loans to the assessee and accordingly made addition of Rs. 21.61 Crores.

3 3.1. Proceeding further, the AO also quoted the loan taken from Sparzana Aviation Private Limited amounting to Rs. 1.67 Crores. On perusing the financials of the said company, the AO came to the conclusion that it has no real creditworthiness to provide such loans to the assessee as the assessee could not furnish the bank statement of the said company. Accordingly, the addition of Rs. 1.67 Crores were made. 3.2. The assessee agitated the matter before the ld. CIT(A) and contended that the loan taken from DN Energy Private Limited was repaid during the year itself and the said company has furnished its bank statement to show its creditworthiness. After considering the facts and submissions and finding that DN Energy Private Limited has explained the source from its bank statement, the ld. CIT(A) deleted the addition of Rs. 21.61 Crores. Insofar as the loan taken from Sparzana Aviation Private Limited is concerned, the ld. CIT(A) found that, out of the borrowings of Rs. 1.67 Crores, the assessee has repaid Rs. 70.50 Lakhs and only Rs. 96.50 Lakhs is outstanding on the last day of the financial year. On the basis of the documentary evidence furnished by the assessee, the ld. CIT(A) deleted the addition.