ASSISTANT COMMISSIONER OF INCOME TAX, NEW DELHI vs. JALCO FINANCIAL SERVICES PRIVATE LIMITED, NEW DELHI

ITA 4209/DEL/2024Status: DisposedITAT Delhi16 January 2026AY 2017-18Bench: SHRI ANUBHAV SHARMA (Judicial Member), SHRI NAVEENC CHANDRA (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the penalty paid to SEBI was an expenditure incurred for the purpose of business to avoid litigation and protect reputation, and thus allowable under Section 37(1). The Tribunal also found that the cash credit was explained and genuine, as the lender company had substantial revenue and was not linked to the alleged entry operator.

What were the facts?

The Revenue appealed against the deletion of additions made by the AO. The AO had added Rs. 5,16,00,000 as unexplained cash credit and disallowed Rs. 10,00,000 as expenditure. The assessee was engaged in share trading.

What were the issues?

Whether SEBI penalty is an allowable business expenditure and whether cash credits were unexplained.

Which sections of the Income-tax Act were involved?

Section 37(1),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, DELHI

Before: SHRI ANUBHAV SHARMA & SHRI NAVEENC CHANDRA

For Appellant: Adv. Sh. AkashOjha, Adv
Hearing: 26.11.2025Pronounced: 16.01.2026

PER ANUBHAV SHARMA, JM:

This appeal is preferred by the Revenue against the order dated

16.07.

2024 of the Ld. National Faceless Appeal Centre (NFAC) (hereinafter

P a g e | 2 Jalco Financial Services Pvt. Ltd.(AY: 2017-18) referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN &

Order No : ITBA/NFAC/S/250/2024-25/1066772909(1)arising out of the order dated 27.12.2019 passed u/s 143(3) of the Income Tax Act, 1961

(hereinafter referred to as ‘the Act’) by the DCIT, Circle-13(1) for AY: 2017-

18.2.

The assessee is a domestic company engaged in the business activit

The order continues below.

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