ACIT, CIRCLE-52(1), NEW DELHI, DELHI vs. SINGHANIA ALU FOIL CONTAINERS MANUFACTURING COMPANY, NEW DELHI

ITA 2743/DEL/2024Status: DisposedITAT Delhi28 January 2026AY 2015-1617 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the findings of the CIT(A) were not to be disturbed. The CIT(A) had meticulously considered the evidence provided by the assessee, including identity particulars, mode of receipt, bank statements of the appellant and loan creditors, loan confirmations, and explanations of the source of funds. The CIT(A) found that the primary onus under Section 68 was discharged by the assessee. The Tribunal noted that the AO had not made any independent inquiries and had relied on general observations. The CIT(A) also correctly observed that the second proviso to Section 68, requiring explanation of the 'source of source', was not applicable to firms and loan transactions in the relevant assessment year. The Tribunal, following the decision of the coordinate bench in the case of Addl.CIT vs. Prayag Polytech Pvt. Ltd. and the Hon'ble Delhi High Court in PCIT v. KRBL Pvt. Ltd., concluded that the assessee had proved the identity, creditworthiness, and genuineness of the transactions. The Tribunal dismissed the Revenue's grounds of appeal.

What were the facts?

The Revenue appealed the order of the CIT(A)/NFAC dated March 28, 2024, for Assessment Year 2015-16. The assessee filed cross objections. The assessee's return declared an income of Rs. 13,65,640. The Assessing Officer (AO) completed the assessment at Rs. 3,01,36,357, adding Rs. 2,86,97,100 under Section 68 of the Income-tax Act, 1961, treating unsecured loans from three parties as unexplained cash credits. The CIT(A) deleted these additions after obtaining a remand report and detailed discussion, finding that the assessee had furnished all necessary evidence regarding the identity, creditworthiness, and genuineness of the loan transactions. The AO's doubts were based on unserved notices and non-submission of ITRs of lenders, and the AO had not conducted independent inquiries.

What were the issues?

1. Whether the Tribunal is justified in upholding the deletion of additions of Rs. 2,86,97,100 made by the Assessing Officer under Section 68 of the Income-tax Act, 1961, as unexplained cash credits, in light of the evidence presented by the assessee regarding identity, creditworthiness, and genuineness of unsecured loans from three parties? Assessee's Contention: The assessee argued that it had satisfactorily discharged the primary onus by providing identity particulars (name, address, PAN), mode of receipt, bank statements, loan confirmations, explanations of the source of funds, and bank statements of the loan creditors. The acceptance and repayment of loans were through banking channels. The assessee also contended that the second proviso to Section 68, requiring explanation of the 'source of source' for share capital, etc., was not applicable to a firm and not to loan transactions. Furthermore, the amendment by Finance Act 2022 regarding 'source of source' for loans is applicable from AY 2023-24 onwards and not for the year under consideration. Revenue's Contention: The Revenue, through its appeal, implicitly contested the CIT(A)'s deletion of the additions, likely arguing that the AO was justified in making the additions due to doubts about the genuineness of the loan transactions, creditworthiness of the lenders, and potentially the source of funds, as indicated by unserved postal notices and non-submission of lender's ITRs.

Which sections of the Income-tax Act were involved?

Section 68,Section 143(2),Section 143(3),Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCHES ‘G’: NEW DELHI.

Before: SHRI S.RIFAUR RAHMAN & SHRI VIMAL KUMAR

For Appellant: Shri Amit Goel, CA
For Respondent: Shri Manish Gupta, Sr.DR
Hearing: 25.11.2025

Heard together (2 matters)

ITA No.2743/Del/2024
CO NO.105/Del/2024

Read from the judgment's own cause title. This page is filed under one of them.

PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER :

4.

CO No.105/Del/2024

The Revenue has filed appeal against the order of the Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [“Ld. CIT (A)”, for short] dated 28.03.2024 for the Assessment Year 2015-16. The assessee has also filed cross objections which is in support of the impugned order. At the time of hearing, ld. AR of the as

The order continues below.

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