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Facts
The assessee filed their return of income, and the case was selected for limited scrutiny. The Assessing Officer added ₹ 8,25,00,000/- as unexplained cash credit based on loans taken from three creditors, treating them as unexplained cash credit under Section 68 of the Income Tax Act. The assessee provided confirmations, details of lenders, and evidence of loan repayment.
Held
The Tribunal held that the assessee had provided sufficient evidence including identity, capacity, and source of funds for the loans, as well as proof of repayment and deduction of tax at source on interest paid. The CIT(A) had also considered these evidences and allowed the appeal.
Key Issues
Whether the loans added by the AO as unexplained cash credit were indeed unexplained, given the documentary evidence provided by the assessee regarding identity, capacity, source of funds, and repayment.
Sections Cited
68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘GAUHATI BENCH’, GUWAHATI
(Assessment Year:2017-18) Sushil Kumar Surana, A.C.I.T., C/o-ThansinghNathmal, A.T. Road, Circle-2, Vs. Opposite Apsara Cinema Hall, Guwahati. Guwahati-781001 (Assam) (Appellant) (Respondent) PAN No. AWDPS 3148 J Revenue by : Shri Santosh Kumar Karnani, Addl. CIT Assessee by : Shri Ramesh Goenka, Advocate. Date of hearing: 11/03/2026 Date of pronouncement: 13/03/2026 O R D E R
PER: BENCH
This is an appeal preferred by the revenue against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 15/07/2024for the AY 2017-18.
The only issue raised by the revenue in the various grounds of appeal is against deletion of addition of ₹ 8,25,00,000/- by the ld. CIT(A) by admitting new evidences as made by the Assessing Officer under Section 68 of the Income Tax Act, 1961 (in short, the Act) as unexplained cash credit.
The facts of the case, in brief, are that the assessee filed return of income on 29/10/2017 declaring total income of ₹ 22,11,510/-. The case of the assessee
ACIT Vs Sushil Kr Surana was selected for limited scrutiny and the statutory notices alongwith questionnaire were issued to the assessee. The assessee complied the said questionnaire by furnishing the details as called for by the Assessing Officer. However, the Assessing Officer on the basis of evidences filed by the assessee, observed that the assessee had taken loan from certain lenders for which the assessee submitted confirmations and other details. He also noted that the assessee has provided 9% interest whereas the assessee stated that interest rate was 12%. The Assessing Officer finally treated the impugned loans by three loan creditors aggregating to ₹ 8,25,00,000/- as unexplained cash credit as the necessary ingredients of Section 68 of the Act were not specified and added to the income of the assessee.
In the appellate proceedings, the ld. CIT(A) allowed the appeal of the assessee after giving a very comprehensive finding after taking into account the submissions/evidences furnished by the assessee qua these three lenders and noted that the assessee has proved identity, capacity of lenders to lend and the source of money and also the genuineness of the transactions, as mentioned in para 5.4.1 to 5.6 of the impugned order.
After hearing the rival contentions and perusing the material on record, we find that the assessee has raised loans from three parties namely M/s Sanaskar Commosale Pvt. ltd. of ₹ 20,00,000/-, Shri Mohit Sethia ₹ 4,60,00,000/- and Smt. Sarala Sethia ₹ 4,60,00,000/-. We note that the loan raised from the first party namely M/s Sanaskar Commosale Pvt. Ltd. was repaid during the financial year and the assessee has filed confirmation/details of loan creditors before the Assessing Officer as well as the ld. CIT(A) and the ld. CIT(A) deleted the same
ACIT Vs Sushil Kr Surana after taking into account these evidences. Similarly in respect of Shri Mohit Sethia and Smt. Sarala Sethia from whom unsecured loans of ₹ 4,60,00,000/- and ₹ 3,45,00,000/- were taken during the year, there were also part repayment during the year. We note that the assessee had paid interest on these unsecured loans after deduction of tax at source. Besides the source of loans were out of the sale proceeds of the land situated in Haryana for which all the evidences including bank statement, copy of sale deeds were placed before us. We note that the ld. CIT(A) after taking into account all these evidences, has allowed the appeal of the assessee by passing a very reasoned and speaking order. Consequently, we are inclined to uphold the same by dismissing the appeal of the revenue.
In the result, appeal of the revenue stands dismissed.
Order pronounced in the open court on 13/03/2026.