ILOVE DIAMONDS PVT. LTD.,CHENNAI vs. ACIT, CC-2,, CHENNAI

ITA 2005/CHNY/2025Status: DisposedITAT Chennai09 March 2026AY 2016-17Bench: SHRI ABY T. VARKEY (Judicial Member), MS. PADMAVATHY.S (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessee had discharged its onus by providing details of the source and nature of share capital and premium received from Shri Anil Jain. The allegation of the assessee using its own funds for layering was not supported by evidence. The Tribunal also noted that Shri Anil Jain had explained the source of his funds from share sale.

What were the facts?

The assessee, engaged in online diamond jewellery trading, filed a return reporting a loss. The Assessing Officer (AO) added Rs. 6.5 Crores received from Shri Anil Jain as unexplained under Section 68 of the Income Tax Act, 1961, and disallowed Rs. 2,50,000/- for bad debts. The CIT(A) upheld these additions.

What were the issues?

Whether the addition of Rs. 6.5 Crores under Section 68 is sustainable when the assessee has provided evidence for the identity, creditworthiness, and genuineness of the transaction? Whether the disallowance of bad debts is justified? Whether set-off of losses should be allowed?

Which sections of the Income-tax Act were involved?

Section 68,Section 250,Section 131,Section 37,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & MS. PADMAVATHY.S

Hearing: 11.02.2026Pronounced: 09.03.2026

PER PADMAVATHY.S, A.M: This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 20.05.2025 for Assessment Year (AY) 2016-17. The assessee raised the following ground of appeal:

“1. Addition under Section 68 of the Income Tax Act, 1961 (Rs. 6,50,00,000/

The order continues below.

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