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Facts
During search operations, incriminating material was found, leading to revised income disclosures. The assessee's group, comprising nine entities engaged in mining, was subject to search. The revenue appealed against the orders of the first appellate authority concerning assessment years 2017-18 and 2018-19.
Held
The Tribunal held that the profit rate declared by the assessee was substantially higher than that derived from seized materials and regular books, making further additions unwarranted. For AY 2017-18, the actual profit rate was 2.28% compared to the offered 5%, and for AY 2018-19, it was 1.47% compared to the offered 14-15%. The addition of unsecured loans was deleted as the assessee provided sufficient documentary evidence.
Key Issues
Whether the additions made by the AO and sustained by the CIT(A) are justified based on the seized material and the assessee's declared income? Whether the assessee discharged the onus of proof for unsecured loans under Section 68?
Sections Cited
153A, 132, 40A(3), 40(a)(ia), 153D, 68
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Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI RAJPAL YADAV & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
सुनवाईकीतारीख/Date of Hearing : 18-09-2025 घोषणाकीतारीख /Date of Pronouncement : 14/10/2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. The revenue is in further appeal for Assessment Years (AY) 2017-18 & 2018-19 against separate but identical orders of learned first appellate authority. The assessee has filed cross-objections on legal grounds as well as on merits in both the years.
The registry has noted delay of 667 days in assessee’s cross- objections, the condonation of which has been sought by Ld. AR on the strength of condonation petition which is accompanied by an affidavit of one of the partners of the assessee-firm. In the affidavit, it has been stated that the firm discontinued its business since July, 2022 and its business premises was closed since then. Hence, it did not receive any notices of departmental appeals as filed before Tribunal. Later on, the assessee’s counsel applied for certified copies on 18-07-2024 which was received on 05-08-2024. The records were voluminous and the same were handed over by Ld. AO to assessee’s counsel on 25-10- 2024. Thereafter, the cross-objections could be filed by the assessee. The supporting documents, in this regard, have been placed on record. The Ld. AR also filed an affidavit supporting the same. The Ld. CIT-DR opposed condonation of delay. However, after considering the averments made in the affidavit and keeping in mind the guiding principles laid down by Hon’ble Apex Court in the case of Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987; (2) TMI 61 SC), we condone the delay in assessee’s cross-objections and proceed for disposal of the appeals & cross-objections on merits.
First, we take up revenue’s appeal and assessee’s cross- objections for AY 2017-18 which arises out of an order of learned Commissioner of Income Tax (Appeals)-3, Gurgaon [CIT(A)] dated 28- 09-2022 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 153A of the Act on 23-06-2021. The twin issues that arise for our consideration is Net profit addition of Rs.126.98 Lacs and another addition of unsecured loans for Rs.81.99 Lacs as made by Ld. AO in the assessment order. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.
The assessee belongs to Majha group of cases. The assessee- group having nine entities was subjected to search action u/s 132 by the department on 05-04-2018 wherein digital pen-drive and incriminating material was found. Based on the same, identical assessments were framed on all the entities of the assessee-group. The present appeal was heard along with other appeals of the assessee-group. It was admitted position that facts as well as issues are substantially the same in all the appeals and therefore, our adjudication in lead appeal would have an equal application on the other appeals also. The lead order has been passed by us in the case of Shri Karaj Singh (ITA No.726/Chandi/2022 & Co. No.16/Chandi/2024) the ratio of which would accordingly, apply to the present appeals also.
Based on incriminating material as found during search operations, the assessee filed revised return of income during the course of assessment proceedings by disclosing net profit rate of 5% on gross turnover of Rs.25.39 Crores. However, Ld. AO estimated assessee’s income at 10% on gross receipts and made additions of Rs.126.98 Lacs. Upon further appeal, Ld. CIT(A), considering expenses found recorded in seized documents as well as expenses found recorded in regular books, worked out actual profit rate of 2.28% which was much lower than the profit rate of 5% as already declared by the assessee in its revised return of income. Therefore, the impugned addition was deleted against which the revenue is in further appeal before us.
Similar assessment was framed for AY 2018-19 wherein the assessee offered net profit of 15% in the revised return of income but Ld. AO enhanced the same to 25% of the assessee’s turnover and made addition of Rs.633.83 Lacs. The Ld. CIT(A), vide para 6.9 of the impugned order for AY 2018-19, estimated profit rate of 18% and restricted the impugned addition to the extent of Rs.190.29 Lacs. Aggrieved, the revenue as well as the assessee has preferred further appeal / cross-objection before us.
7. We find the identical issue has been adjudicated by us in the case of Shri Karaj Singh (ITA No.726/Chandi/2022 & Co. No.16/Chandi/2024) as under: - 4. From the facts, it emerges that the assessee-group having nine entities is engaged in mining activities. These nine entities are holding separate mining licenses from state government and are preparing separate books of accounts reporting separate profits. However, consolidated financial data was being maintained for all these nine entities. The assessee-group was subjected to search action on 05-04-2018 wherein various loose papers as well as accounting data relating to business of assessee as well as other mining entities in physical form and pen-drive was found and seized from the corporate office at #1060, Sector-17, HUDA, Jagadhari. Considering the same, the assessee-group filed return of income declaring business income. The present assessee declared income of Rs.48.60 Lacs including business income of Rs.28.16 Lacs. However, during the course of assessment proceedings, the assessee agreed to offer additional income and filed revised return of income despite its claim that such additional income was never actually realized by them. The Ld. AO enhanced the declaration so made by the assessee to 25%, inter-alia, by considering three comparable entities. However, Ld. CIT(A) observed that the entities selected by Ld. AO were not comparable entities and Ld. CIT(A) worked out NP rate of 17.16% by making various adjustments to the profits on the basis of entries found noted in the seized document. Finally, Ld. CIT(A) upheld application of Net Profit Rate of 18% is impugned before us. The issue before us, thus, is in a narrow compass and related with determination of estimated profit rate earned by the assessee in the background of material seized during search action. At the outset, we concur with the approach of Ld. CIT(A) in rejecting comparable entities of the assessee as well as selected by Ld. AO since the additions are to be based on seized material as found during the search and the same could not be estimated by taking mean profit rate of other entities as disclosed by them in their audited financial statements. It is another fact that the comparable entities as selected by the assessee as well as by Ld. AO are not even otherwise functionally comparable with the functions of the assessee and therefore, the approach of Ld. CIT(A), to that extent, could not be faulted with.
5. The undisputed fact that emerges is that though Ld. CIT(A) has computed NP rate of 17.16% but, finally, it has applied NP rate of 18%. This is in sharp contrast to the fact that for immediately preceding AY 2017-18, Ld. CIT(A) himself estimated substantially lower NP rate of the assessee at 2.28% whereas there is no change in assessee’s business model. The approach of Ld. CIT(A) is contradictory to the rule of consistency and such vast variation in NP rates of two consecutive years, under identical business conditions, could not be sustained in law. The assessee initially reflected NP rate of 5.85% which has later been substantially enhanced to 14.05% despite the fact that the assessee is having much lower profit as per seized document.
6. It has been stated by Ld. AR that to estimate the NP rates, Ld. CIT(A) has made computations from combined seized material which include Profit & Loss Account as found in the pen-drive in the name of M/s GM & Co. and mining details as noted in the loose papers. However, there is no entity-wise bifurcation of financial data separately for each of the nine entities. The prime grievance of the assessee is that even by considering the seized material as found during the search, the profit rate would only be 1.47% and not 17.16% as computed by Ld. CIT(A). As against this, the assessee has already declared substantially higher profit rate of more than 14% to put a quietus to the issue. As per Ld. AR, the Ld. CIT(A) erred in not allowing actual expenses such as Mining fees paid to Government, VAT paid, new mining point setup expenses as noted in the seized material as well as Labour welfare expenses, environment protection expenses etc. as recorded in regular audited books of accounts. The Ld. AR further contended that when the income is estimated, no such adjustment is to be made for probable disallowances u/s 40A(3) / 40(a)(ia) in terms of decision of Jurisdictional High Court in the case of Smt. Santosh Jain (296 ITR 324) & Aggarwal Engg. Co. (302 ITR 246). Another argument is that there is no unaccounted profit earned on unaccounted sales. The combined regular sales of mining entities were Rs.77.43 Crores which substantially matches with the seized material after making allowance of discount as offered by the assessee group to its customers. On these facts, Ld. AR asserted that the additional profit already offered by the assessee is much in excess of profit emerging from seized materials found during search and impugned addition as sustained in the impugned order deserve to be deleted. On the issue of allowance of discount expenses of Rs.153.55 Crores while estimating business profit at 18%, Ld. AR stated that when Ld. AO assessed profit at 25%, he himself allowed the discount while estimating the profit and thus, the same could not be disputed by revenue. If discount is excluded from the computations, the same would yield unrealistic profit rate of 84% which is not, at all, possible in this line of business.
The Ld. AR reiterated legal ground of mechanical approval u/s 153D on the ground that the assessee had submitted voluminous replies during the course of assessment proceedings. The Ld. AO forwarded draft assessment order and complete assessment record to Ld. Addl. CIT on 18-06-2021 seeking approval u/s 153D. This approval was granted on the very next day i.e., on 19-06-2021 in a non-speaking manner and without spelling out any reasons or comments on the findings in the draft order or the seized material or findings of investigation wing in appraisal report. Moreover, on the same day, Ld. Addl. CIT approved draft assessment order in more than 20 other cases of the same group wherein different issues, voluminous submissions and abundant seized material was involved. This would show that Ld. Addl. CIT granted approval u/s 153D in a non-speaking and mechanical manner without due application of mind on the seized material and without considering the submissions of assessee. Such an approval is bad-in-law and would render assessment null and void. Reference has been made to the decision of Chandigarh Tribunal in the case of SP Singla Constructions Pvt. Ltd (ITA No.140-145/Chd/2024 dated 17-01-2025) wherein, on similar facts, the assessment was quashed and additions were set aside. Similar reliance has been placed on the decision of Delhi Tribunal in the case of Sushen Mohan Gupta (ITA 2999/Del/2024 dated 20-05-2025) quashing assessment on similar grounds.
8. The Ld. AR has tabulated the comparative figures as per Income Tax Returns, seized material as per orders of lower authorities as under:- COMPARATIVE FIGURES ASS PER ITR, SEIZED MATERIALS, AO ORDER AND CIT(a) FOR AY 2018-19 IN CASE OF ALL 9 MINING ENTITIES No ENTITY Gross Mining Net sales Mining sales Profit as per Profit Profit sales considered (after as per audited P&L A/C offered for determined by CIT(A) and discount) as P&L A/C ( (Refer tax by by AO (25% of A.O. on basis of per seized Refer Audited Audited P&L assessee Gross Mining Seized material material (PG P&L at Pages at Pages 65 before A.O. Sales (PG 95 of CIT(A) 46 of PBK 2) 65 to 77) to 77) (Refer PG Order. 95 of CIT(A) order) 1 Northern 367,814,720 109,107,210 109,107,210 12,226,154 54,979,869 91,853,680 Royalty Co 2 Delhi Royalty 204,094,825 68,973,800 68,973,800 5,019,766 30,492,528 51,023,706 Co 3 Routes & 203,568,151 59,479,423 59,479,423 3,892,313 30,535,226 50,892,038 Journeys 4 Development 159,631,779 47,416,917 47,416,917 1575,242 23,944,764 39,907,945 Strategies Ind Pvt Ltd 5 Mubarikpur 633,832,815 215,614,964 219,614,964 10,193,139 95,060,051 158,458,204 Royalty Co 6 JSM Foods 149,368,071 102,942,179 102,942,179 1941,516 20,072,285 37,342,019 Private Limited 7 Karaj Singh 218,260,541 48,147.611 48,147,611 2,816,286 ,3,0659,375 54,565,135 8 Paramjeet 211,296,850 44,819,500 44,819,500 2,628,173 29,814,718 52,824,213 Singh 9 Yamuna Infra 160,029,000 77,870,000 77,870,000 40,007,250 developers Pvt Ltd Total 2,307,896,752 774,371,604 774,371,604 36,409,558 31,409,598 57,69,74,188 The Ld. AR thus submitted that net mining sales (after discount as per seized material) was Rs.77.43 Crores which matches with the regular mining sales as disclosed by the nine mining entities. The Ld. AR also stated that Ld. CIT(A) did not allow full mining installment of Rs.98.74 Crores as recorded in the books of accounts of nine mining entities. Out of Rs.98.74 Crores, Ld. CIT(A) did not allow installment to the extent of Rs.28.04 Crores as tabulated below: - COMPARATIVE FIGURES OF MINING INSTALLMENTS AS PER P&L OF MINING ENTITIES & ALLOWED BY CIT(A) AY 2018-19 ENTITY Mining Installment debited to P Mining installment Expense not allowed by & L A/C for A Y 18-19 (PG 65-66) allowed by CIT(A) CIT(A)
Northern Royalty Co 10,49,90,403 70,69,50,500 28,04,68,722 Delhi Royalty Co 9,50,95,233 Routes & Journeys 7,771,40,055 Development Strategies Ind Pvt 5,19,12,518 Ltd Mubarikpur Royalty Co 25,31,78,898 Ganga Yamuna Mining 1,36,02,771 Company JSM Foods Private Limited 11,81,14,281 Karaj Singh 6,14,19,016 Paramjeet Singh 4,83,19,852 Yamuna Infra developers Pvt 16,36,45,695 Ltd Total 98,74,18,722 70,69,50,000 28,04,68,722 9. In yet another tabulation, Ld. AO reconciled the consolidated Profit as per seized material (as per assessee) with profit calculated by CIT(A) for mining entities as under: - PARTICULARS AMOUNT Remarks PROFIT DETERMINED BY 39,61,88,233 As per page 105-106 of CITA Order CIT(A) ORDER LESS: EXPENSES RECORDED AS PER SEIZED PAPER AT PG 46 OF PBK-2 BUT NOT ALLOWED BY CIT(A) (2,31,20,138) As per seized material refer page 46 of PBK-2, VAT expense of Rs 4.94cr was VAT (NET OF CREDITS) recorded in debit side while VAT & GST Recovered of Rs. 2.63cr was recorded on credit side. CIT(A) has ignored both the items while computing profit while VAT being actual business expense deserved to be allowed.
(1,54,45,530) As per seized material at ps46, new point expenses of Rs. 1,04,00,000/- New NEW POINT EXPENSES point investment and Rs. 50,45,300/- New point Jaidhari was recorded as expense. CIT(A) has wrongly considered these expenses as Capital expense on pg 108 of his order whereas these related to expenditure on setting up new mining point and thus was a revenue expenditure and not a capital expenditure LESS: EXPENSES RECORDED IN ACTUAL BOOKS OF ACCOUNTS OF MINING ENTITIES BUT ONLY ALLOWED PARTIALLY BY CIT(A) MINING INSTALLMENT (28,04,68,722) As per audited books of the 9 entities, total mining installments expense stood at Rs. 98,74,18,222/- (refer summary above). However, CIT(A) has only allowed expense of Rs.70,69,50,000/-on pg 105 of order. The amount as per books was in line with amounts payable as per mining contracts and-had accrued during the current year and was thus allowable in full.
LESS: EXPENSES RECORDED IN ACTUAL BOOKS OF ACCOUNT OF MINING ENTITIES BUT NOT ALLOWED ENTIRELY BY CIT(A) CSR EXPENSES (15,235,000) On page 106, CITA has only allowed depreciation, interest and audit fees as per actual books of accounts. On page 108, CITA observed that CSR expenses and Environment protection expense are not allowable separately as they were part of misc expenses of Rs 6.28cr already allowed as per seized books. However, there is no basis to such assumption when other expenses as per actual books have already been allowed. CSR expense and Environmental protection expense and Labour welfare expense were actually paid by assessee as per books and thus allowable while estimating profits. The figures are as per audited P&L of 9 entities at pg 65-77.
ENIVRONMENTAL (22,402,500) PROTECTION EXP LABOUR WELFARE EXP (5,613,000)
PROFIT AS PER ASSESSEE 3,39,03,343 PROFIT % 1.47% (AGAINST SALES OF RS 230,78,96,752/- CONSIDERED BY CIT(A))
In above tabulation, Ld. AR demonstrated that by considering the expenses as recorded in the seized material and expenses as debited in the regular books of accounts, the profit rate as earned by all the mining entities would only be 1.47% whereas all these entities have already declared NP rates in the range of 14% to 15% which are substantially higher than this profit.
10. To further support his argument, Ld. AR also tabulated comparative chart of profit computed by CIT(A) for all mining entities and as computed by the assessee for this year as under: - COMPARITIVE CHART OF PROFIT COMPUTED BY CIT(A) AND AS PER ASSESSEE FOR AY 2018-19 (CONSOLIDATED FOR ALL 9 MINING ENTITIES) PARTICULARS AS PER CIT(A) AS PER Remarks ASSESSEE Gross sales receipt as per seized 2,307,896,752 2,307,896,752 As per pg 46 of PBK documents Rehabilitation charges recovered 766,072,879 766,072,879 As per pg 46 of PBK Misc. Income 371,552 371,552 As per audited books of accounts of all 9 entities Total Gross Receipts 3,074,341,183 3,074,341,183 Less: (-) Discount 1,533,521,146 1,533,521,146 As per pg 46 of PBK Annual contract money (payable to 706,950,000 987,418,722 As per audited books of accounts of all 9 the Govt, of Haryana for mining entities rights) Salary account 64,590,764 64,590,764 As per pg 45 of PBK Wages 40,844,566 40,844,566 As per pg 45 of PBK Diesel 44,394,113 44,394,113 As per pg 45 of PBK Diwali expenses 4,370,100 4,370,100 As per pg 45 of PBK Land compensation 110,803,555 110,803,555 As per pg 45 of PBK less Rs 76 lakhs disallowed by CITA Land on rent 24,116,384 24,116,384 As per pg 45 of PBK Other expense 20,000,000 20,000,000 As per pg 45 of PBK Misc. expenses 62,870,938 62,870,938 As per pg 45 of PBK Bank charges 373,976 373,976 As per pg 45 of PBK Crossing contract expenses 840,500 840,500 As per pg 45 of PBK Generator expenses 1,632,000 1,632,000 As per pg 45 of PBK Machine rent 26,770,458 26,770,458 As per pg 45 of PBK Fees and taxes 11,162,300 11,162,300 Including HPSCB Draft and Wildlife forest A/c as per pg 45 of PBK Insurance account 650,590 650,593 As per pg 45 of PBK
Legal expenses 5,733,000 5,733,000 As per pg 45 of PBK Printing stationary 1,429,972 1,429,972 As per pg 45 of PBK Road repair 9,356,588 9,356,588 As per pg 45 of PBK Depreciation 3,586,000 3,586,000 As per books of account Interest on loan 3,756,000 3,756,000 As per books of account Audit fees 400,000 400,000 As per books of account VAT (net of recovery) - 23,120,138 As per pg 45 of PBK NEW POINT EXPENSE 15,445,530 As per pg 45 of PBK CSREXPENSES - 15,235,000 As per books of account of all 9 mining entities ENVIRONMENTAL 22,402,500 As per books of account of all 9 mining PROTECTION EXP entities LABOUR WELFARE EXP 5,613,000 As per books of account of ail 9 mining entities Total expenses 2,678,152,950 3,040,437,843 Net Business Profit 396,188,233 33,903,340 PROFIT % 17.16% 1.47% The Ld. AR thus demonstrated that going by the seized document and regular books, the profit earned by the ground is merely in the range of less than 1.5%.
11. After going through above tabulations, we find substance in the plea / working of Ld. AR. It could be seen that considering the expenses found recorded in the seized material as well as in the regular books of accounts (allowed partially by Ld. CIT(A) while arriving at profit rate of 17.16%), the aggregate net profit margin for the group as a whole is less than 1.5%. If the material is considered in toto, the NP rate for all the entities work out to be 1.47% which is substantially lower than the declared profit of 14% to 15% by the assessee group in the revised return of income. This being the case, the profit declared in the revised return of income is to be accepted and in our considered opinion, no further addition is warranted in the hands of the assessee. The profit rate declared by the assessee is substantially higher. Pertinently, profit rate of less than 3% has been accepted in immediately preceding year in assessee’s case and such higher estimation of 18%, under identical business conditions, could not be sustained in law. In other orders, we delete the impugned addition of Rs.86.27 Lacs as sustained in the impugned order and allow the corresponding grounds of assessee’s cross-objection. The revenue’s ground of appeal stands dismissed.
Facts being pari-materia, the same, we direct Ld. AO to accept the revised return of income as filed by the assessee for AY 2018-19. In AY 2017-18, the undisputed fact that emerges is that as per seized material as well as regular books of accounts, actual profit rate as earned by the assessee work out to mere 2.28% whereas the assessee has already offered profit rate of 5%. Therefore, no further addition is justified in the hands of the assessee for AY 2017-18. The corresponding grounds of revenue’s appeal as well as assessee’s cross-objections, for both the years, stand disposed-off accordingly.
In AY 2017-18, Ld. AO has made another addition of unsecured loan of Rs.81.99 Lacs as taken by the assessee from following parties:- No. Name Amount (Rs.) Documents furnished by the assessee 1. M/s Jandu Construction Co. Rs.2.94 Lacs Copy of PAN 2. M/s Kailash Agro Foods Rs.2.85 Lacs Nil 3. M/s Mohit Builders & Suppliers Rs.3.00 Lacs Nil 4. Shri Mukesh Kumar Rs.0.50 Lacs Nil 5. Shri Samrist Rs.1.00 Lacs Nil 6. Md. Shakil Ahmed Rs.0.70 Lacs PAN and Confirmation 7. Shri Guru Nanak Stone Crusher Rs.28.00 Lacs Copy of ITR, Bank (UP) Statements 8. Shri Guru Nanak Stone Crusher Rs.43.00 Lacs Copy of ITR, Bank (HR) Statements Total Rs.81.99 Lacs In the absence of Balance Sheet of Shri Guru Nanak Stone Crusher and considering the fact that this entity reflected low income, the claim was rejected by Ld. AO. Finally, the amount of Rs.81.99 Lacs was added to the income of the assessee u/s 68. In AY 2018-19, the assessee had taken loan of Rs.78 Lacs from Shri Guru Nanak Stone Crusher which was similarly added to assessee’s income u/s 68 in that year.
Upon further appeal, Ld. CIT(A) observed that financial statements of Shri Guru Nanak Stone Crusher were placed by the assessee before Ld. AO along with confirmation, ITRs and bank statements. The assessee’s name was appearing in the financial statements of that concern. No adverse finding was recorded by Ld. AO on the documentary evidences as furnished by the assessee. Low income could not be the sole factor for determining creditworthiness of the lender since every case was to be examined on totality of facts after taking into account all the facts available on the record. Therefore, the addition of Rs.71 Lacs and Rs.78 Lacs as made by Ld. AO in AYs 2017-18 & 2018-19 respectively was deleted. The remaining addition of Rs.10.99 Lacs for AY 2017-18 was confirmed. Aggrieved, the revenue is in further appeal before us in both the years. The assessee is aggrieved by confirmation of addition of Rs.10.99 Lacs in AY 2017-18.
The factual findings as rendered by Ld. CIT(A) in the impugned orders remain uncontroverted before us. It could be seen that the assessee has filed sufficient documentary evidences viz. Copy of ITRs, confirmation, PAN details and financial statements of the lender Shri Guru Nanak Stone Crusher. The assessee’s name figure as one of the borrowers in the financial statements of the lender. As rightly held by Ld. CIT(A), low income of the lender could not be a criterion to make impugned additions u/s 68. On these facts, we upheld the deletion of additions, for both the years, as made by Ld. AO on account of loan taken by the assessee from Shri Guru Nanak Stone Crusher. The corresponding grounds of revenue’s appeals, in both the years, stand dismissed.
The addition of Rs.10.99 Lacs u/s 68 as sustained in the impugned order is with respect to following lenders: - No. Name Amount (Rs.) 1. M/s Jandu Construction Co. Rs.2.94 Lacs 2. M/s Kailash Agro Foods Rs.2.85 Lacs 3. M/s Mohit Builders & Suppliers Rs.3.00 Lacs 4. Shri Mukesh Kumar Rs.0.50 Lacs 5. Shri Samrist Rs.1.00 Lacs 6. Md. Shakil Ahmed Rs.0.70 Lacs Total Rs.10.99 Lacs With respect to Md. Shakil Ahmed, the assessee has duly furnished confirmation of account along with PAN details of the lender. Therefore, the onus as required u/s 68 was duly discharged by the assessee and the addition to the extent of Rs.0.70 Lacs stand deleted. The other lenders are small lenders who figures in assessee’s Balance Sheet in subsequent years also. Therefore, in the absence of any positive finding creating doubt on the creditworthiness of these small lenders, the addition so sustained in the impugned order stand deleted. The assessee succeeds in its corresponding grounds of appeal
13. The assessee has raised legal issues for both the years in its cross-objections. These issues have been rendered infructuous since we have dismissed revenue’s grounds on merits and allowed assessee’s cross-objections on merits. These grounds are accordingly dismissed as infructuous.
Conclusion 14. The revenue’s appeals for AY 2017-18 and AY 2018-19 stand dismissed. The assessee’s cross-objections, for both the years, stand partly allowed. Order pronounced on 14/10/2025