NARENDRA BANSAL,DELHI vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRLCE -12(2), NEW DELHI

PER MAHAVIR SINGH, VP: This appeal by the Assessee is emanating from the order of the Ld. Commissioner of Income Tax (Appeals-31), Delhi in Appeal No. CIT(A), Delhi- 4/10286/2018-19 dated 08.08.2025. Assessment was framed by the ACIT, Circle 12(2), New Delhi u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred the Act) vide order dated 26.12.2018 relating to assessment year 2016-17. 2. The grounds raised by the assessee read as under:- 1. That the AO has erred in passing the impugned order u/s. 143(3) of the Act by assessing a total income of Rs. 57,10,37,580/- (round off) by making an addition of Rs. 1,03,95,568/- in complete ignorance of 2 | P a g e facts on record and also in complete violation of law and Ld. CIT(A) has erred in upholding the same. 2. That on the facts and circumstances of the case and in law, the order dated 8.8.2025 passed by the CIT(A) confirming the assessment order dated 26.12.2018 passed u/s. 143(3) by the ACIT, Circle 12(2), New Delhi, is bad in law and void ab initio. 3. That the Ld. CIT(A) erred in upholding the addition of Rs. 1,00,00,000/- made by the AO as unexplained cash credit u/s. 68 of the Act in respect of loan received from M/s Ambarnuj Finance and Investments Pvt. Ltd., an RBI registered NBFC, even though the appellant had duly proved the identity, genuineness of the transaction and creditworthiness of the lender by furnishing confirmation, bank statements, audited accounts and ITR of the lender alongwith the other relevant documents. 4. That the Ld. CIT(A) further erred in upholding the disallowance of interest of Rs. 3,95,568/- paid on the above loan by holding that the same was not incurred for the purposes of business, despite the fact that the loan was availed and repaid through banking channels for business purposes and TDS was duly deducted on the interest paid. 5. That both the AO and CIT(A) erred in placing reliance merely on an Investigation Wing report which alleged “accommodation entries” of Jain Brothers without bringing on record any direct nexus between the appellant and the alleged accommodation entries and also without confronting the appellant with any adverse material or affording cross examination of any third party whose statements were proposed to be used against the appellant. 6. That the authorities below failed to appreciate that once the appellant had discharged the primary onus under section 68 by proving the identity of the creditor, the genuineness of the transaction and the 3 | P a g e creditworthiness of the creditor, the burden shifted on the Department to prove otherwise, which was not done. 7. That the AO has erred in passing the impugned assessment order without acknowledgement of a single document submitted during the assessment proceeding and CIT(A) has erred in upholding the same. The order of the CIT(A) is confirming the order of the AO is bad in law and contrary to the facts on record. 3. Brief facts of the case are that assessee company filed its return of income on 30.11.2016 declaring total income of Rs. 56,06,42,010/-. The case was selected for complete scrutiny under CASS and the notice u/s. 143(2) of the Act dated 8.8.2017 was issued and served upon the assessee. Thereafter, notices u/s. 142(1) alongwith questionnaire were issued and served upon the assessee. AO noted that the assessee has taken a short term loan of Rs. 1.00 crore during the year 2015-16 from Ambarnuj Finance and Investments Pvt. Ltd. and has fully repaid the same during the year under consideration, alongwith the interest on 12.10.2015 amounting to Rs. 1,03,95,568/- through its YES Bank, TDS being duly deducted and deposited on interest payment made by the assessee. AO treated the sum of Rs. 1.00 crore received from Ambarnuj finance and Investments Pvt. Ltd. as unexplained cash credit and adding to the total income of the assessee, moreover AO also held that interest paid net of TDS amounting to Rs. 3,95,568/- on said loan treating the same as not incurred for purpose of business. Against the above, assesse appealed before the Ld. CIT(A), who vide his order dated 8.8.2025 has upheld the action of the AO. 4. Aggrieved, assessee is in appeal before us. 5. At the time of hearing, Ld. AR for the assessee submitted that Ld. CIT(A) erred in upholding the addition of Rs. 1.00 crore made by the AO as unexplained cash credit u/s. 68 of the Act in respect of loan received from M/s Ambarnuj Finance & Investments Pvt. Ltd., an RBI registered NBFC, even though the assessee had duly proved the identity, genuineness of the transaction and creditworthiness of the lender by furnishing confirmation, bank statements, audited

4 | P a g e accounts and ITR of the lender alongwith other relevant documents. He further submitted that CIT(A) erred in upholding the disallowance of interest of Rs. 3,95,568/- paid on the above loan by holding that the same was not incurred for the purpose of business, despite the fact that the loan was availed and repaid through banking channels for business purposes and TDS was duly deducted on the interest paid. It was further submitted that AO as well as CIT(A) erred in placing reliance merely on an Investigation Wing Report which alleged “accommodation entries” of Jain Brothers without brining on record any direct nexus between the assessee and the alleged accommodation entries and also without confronting the assessee with any adverse material or affording cross examination of any third party whose statements were proposed to be used against the assessee. It was further submitted that the authorities below failed to appreciate that once the appellant had discharged the primary onus under section 68 of the Act by proving the identity of the creditor, the genuineness of the transaction and the creditworthiness of the creditor, the burden shifted on the Department to prove otherwise, which was not done.
6. On the other hand, Ld. DR relied upon the orders of the authorities below.
7. We have heard both the parties and perused the records. We find that during the assessment proceedings, the Assessee has submitted his reply by stating that M/s Intex Industries Jammu has taken a short term loan of Rs. 1.00 crore during the year 2015-16 (in April 2015) from Ambarnuj Finance and Investments Pvt. Ltd. and has fully repaid the same during the year under consideration, alongwith interest on 12.10.2015 amounting to Rs. 1,03,95,568 through its YES bank, TDS being duly deducted and deposited on interest payment by Intex Industries Jammu. The copy of account of ledger of Ambarnuj Finance and Investments Pvt. Ltd. in books of Intex Industries Jammu reflecting the said transactions was submitted before the AO and also copy of confirmation received from the lender Ambarnuj Finance and Investments Pvt. Ltd. along with copy of ITR V for AY 2016-17, bank statement of the company reflecting the above mentioned transaction and audited financials for 5 | P a g e year ended 31.3.2016 of the lender was also submitted. It is also noted that copy of bank statement of Axis Bank account no. 913020039081879 in name of Intex
Industries, in which loan amount of Rs. 1 crore was received during the month of April, 2015 (4 cheques of Rs. 25 lacs each) has also been submitted. It is noted that copy of bank ledger YES bank account no. 023581300000294 through which payment made in books of Intex Industries Jammu has also been attached alongwith copy of bank statement for month of October, 2015, it is noted that the aforesaid documentary evidences has been acknowledged by the AO, but not fully appreciated and considered by the AO. We further find that Ld. CIT(A) has passed a cryptic and non-speaking order by observing as under:-

“Since the appellant has neither been able to prove the genuineness of transaction before the AO nor before me. The transaction in question is clearly an accommodation entry which is to be treated in law as ingenuine transaction and therefore, cannot escape the rigors of section 68 of the Act. In view of the foregoing, I am of the considered view that the AO is justified in making the additions of Rs. 1,00,00,000/- as unexplained cash credit and of Rs.3,95,568/-, as expenses not for the purpose of business and that the said additions are sustainable in law as well as on facts. I hold accordingly. Hence, the said additions made by the AO are hereby confirmed.”

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Order pronounced in the Open Court on 12.3.2026. (S. RIFAUR RAHMAN)
VICE PRESIDENT

Date: 19.03.2026
SRBhatnaggar