INCOME TAX OFFICER, WARD -5, PANCHKULA, AAYAKAR BHAWAN, SECTOR-, PANCHKULA vs. NAVDESH INFRATECH, PANCHKULA

During scrutiny assessment proceedings, the assessee did not make any effective representation. Accordingly, Ld. AO made twin additions of Rs.970.13 Lacs & Rs.501.08 Lacs u/s 69A which represent unsecured loans and partners’ fund respectively. During first appeal, the assessee preferred additional evidences u/r 46A which were subjected to remand proceedings. The Ld. AO furnished remand report on 06-11-2023 which is placed on record. After due consideration of remand report as well as assessee’s submissions, Ld. CIT(A) rendered factual findings. On the issue of partner’s funds, it was observed that the assessee-firm had two partners i.e., Shri Vishnu Prakash Goyal and Shri Navraj Mittal. Both the partners had filed their respective Income Tax Returns and the partner’s funds were received through banking channels. The amount of Rs.4.60 Crores was received from Shri Vishnu Prakash Goyal whereas the amount of Rs.41.08 Lacs was received from Shri Navraj Mittal. In support of sources of capital contribution, the partners filed detailed confirmations, bank statements and supporting documents. The partners also furnished sale deeds evidencing receipt from sale of properties, OD advance against FDRs, financial statements with Ld. AO. However, Ld. AO did not make any enquiry with respect to these sources. Since the assessee furnished complete documents establishing the sources of capital contribution, the impugned addition of Rs.501.08 Lacs was deleted. Similarly, with respect to unsecured loans, the assessee had filed detailed confirmation from the lenders, their respective Income tax Returns, bank statements and duly explained the sources of these loans. However, Ld. AO chose not to conduct any independent enquiry from any of the parties whereas the assessee had duly discharged the onus of proving the identity of the lenders as well as their genuineness and creditworthiness of the lenders. Therefore, this addition was also deleted. Aggrieved, the revenue is in further appeal before us. Our findings and Adjudication 3. From the factual matrix, it clearly emerges that the assessee has furnished various documents during remand proceedings to Ld. AO in support of capital contribution and unsecured loans. The same has been placed before us also on Page Nos.14 to 184 of paper book along with copy of remand report (Page Ns.188 to 195 of the paper book). Upon perusal of the same, it could be seen that the capital has been contributed by the two partners of the assessee-firm through banking channels. The assessee furnished copy of partnership deed as well as copy of capital accounts of both the partners along with bank statement of the firm. Shri Vishnu Prakash Goyal contributed Rs.4.60 Crores for which the assessee furnished Income Tax Return of the partner along with bank account statements of the partners. The assessee also furnished detailed confirmation from the partners explaining sources for each of the payments along with supporting documents and third-party confirmations. Similar documents were furnished with respect to capital contributed by Shri Navraj Mittal. Upon perusal of the same, it could very well be concluded that the assessee was successful in discharging the onus of establishing the sources of capitals contribution made by its two partners.

Similarly, the assessee has obtained unsecured loans of Rs.970.13 Lacs from three lenders as under: - No. Name Amount (Rs. In Lacs) 1. M/s Kumar Associates Rs.830.13 Lacs 2. Ms. Meena Goyal Rs.0.55 Lacs 3. M/s VR International prop. Shri Rs.0.85 Lacs Vishnu Prakash Goyal Total Rs.970.13 Lacs It emerges that all the loans have been received through banking channels for which the assessee furnished bank statements of all the three lenders. For Ms. Meena Goyal, the assessee furnished her Income Tax Return and detailed confirmation explaining the sources of loan of Rs.55 Lacs as advanced to the assessee. The supporting documents were also furnished. With respect to M/s VR International, the assessee furnished copy of Income Tax Return of Shri Vishnu Prakash Goyal and confirmation of loan and explained sources of loan of Rs.85 Lacs as advanced to the assessee-firm. It could further be observed that the assessee received loan of Rs.22.79 Crores from M/s Kumar Associates out of which Rs.14.57 Crores was repaid during this year itself. The assessee paid interest of Rs.8.30 Lacs after deduction of Tax at source leaving closing loan balance of Rs.830.13 Lacs against this lender. All the loans have been advanced by this entity out of bank overdraft facility as taken by it from Allahabad Bank. The assessee furnished its Income Tax Return, audited financials statements and confirmation of accounts as supporting evidences. Upon perusal of the same, similar conclusion could be drawn that the assessee has successfully discharged its onus of establishing the sources of unsecured loans.

The Ld. AO, in the remand report, has not concurred with assessee’s substantial documents merely on the ground that the returned income of the partners / lenders was not commensurate with the quantum of capital contribution / unsecured loans. However, the documentary evidences as furnished by the assessee have not been controverted and no fault, whatsoever, same has been pointed out in the same by Ld. AO. In our considered opinion, the logic advanced by Ld. AO to reject the claim of the assessee is ill-founded since the capital or loans could be contributed not only from returned income but also from various others sources which has been well demonstrated by the assessee. The conclusion of Ld. AO is thus clearly fallacious one and without any logic.

Finally, on the given facts and circumstances, the adjudication of Ld. CIT(A) could not be faulted with. Hence, we see no reason to interfere in the same. 7. The appeal stands dismissed. Order pronounced on 20.11.2025.