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Facts
For AY 2014-15, the assessee filed an ITR. Following a search on Banka Group, which was found to be involved in accommodation entries, the Assessing Officer (AO) determined that the assessee had received Rs. 1,00,00,252/- as accommodation entries in the form of loans from DSR Impex Pvt. Ltd. and M.A. Financial Services Pvt. Ltd. The AO made an addition under section 68 of the Income Tax Act, which was subsequently confirmed by the National Faceless Appeal Centre (NFAC).
Held
The Income Tax Appellate Tribunal found that the assessee had provided thorough documentary evidence, including bank statements, ledger accounts, and repayment details with interest, to substantiate the genuineness of the loans and their repayment. The Tribunal concluded that the assessee had adequately explained the receipt of funds, and therefore, the CIT(A)'s confirmation of the addition was incorrect.
Key Issues
1. Validity of re-opening of assessment under section 147 without disposing of objections and based on borrowed satisfaction. 2. Confirmation of addition under section 68 for alleged accommodation entries/short-term loans, ignoring evidence. 3. Confirmation of taxing the amount under section 115BBE and charging interest under sections 234A, 234B, and 234C. 4. Rejection of grounds regarding non-provision of adverse material and denial of cross-examination.
Sections Cited
147, 68, 115BBE, 234A, 234B, 234C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH
Before: Dr. BRR Kumar & Ms. Suchitra Kamble
आदेश/ORDER Per Suchitra Kamble, Judicial Member:
This is an appeal filed against the order dated 19-08-2025 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2014-15.
The grounds of appeal
are as under:-
1. That on facts and in law, the learned NFAC has grievously erred in confirming the re-opening of assessment u/s 147 of the Act, which is only on borrowed satisfaction, and also without disposing off the objections raised by the appellant, and therefore
2. That on facts and in law, the learned NFAC has erred in grievously rejecting the ground regarding not providing the adverse material relied in the order, and also in not providing cross examination of the concerned persons, though specifically requested in the replies filed before AO.
3. That on facts and in law the learned NFAC has grievously erred in confirming the addition of Rs.1,00,00,252/- made u/s 68 of the Act respect of short term loans, completely ignoring the evidence filed.
4. That on facts, and in law, the learned NFAC has grievously erred in confirming the taxing of the said amount u/s 115BBE of the Act.
5. That on facts, and in law, the learned NFAC has grievously erred in confirming the charging of interest u/s 234A, 234B and 234C of the Act.
The appellant craves leave to add, alter, amend any ground of appeal.”
The assessee filed return of income on 24-06-2015 declaring total income total income of Rs. 3,12,610/- for assessment year 2014-15. The assessee derived income from house property, income from business and profession, capital gain and income from other sources. A search and seizure/survey in the case of Banka Group was conducted on 21-05-2018 and it was found that Shri Mukesh Banka is involved in accommodation entry business of Banka Group. The Assessing Officer observed that the assessee has taken the benefit of accommodation entries to the tune of Rs. 1,00,00,252/- during the year under consideration and the transaction carried out by the assessee is merely accommat8on entry and not genuine transaction. The statutory notices were issued to the assessee for which the assessee filed submissions and details from time to time. The Assessing Officer observed Nandita Shaunak Munshaw, A.Y. 2014-15 that the assessee failed to provide documentary evidence to substantiate genuineness of loan of Rs. 28 lacs taken from MA Financial Services Pvt. Ltd. and loan of Rs. 72 lacs from DSR Impex Pvt. Ltd. Thus, the Assessing Officer made addition of Rs. 1,00,00,252/-
Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The ld. A.R. submitted that the assessee has given all 5. the details about DSR Impex Pvt. Ltd. and also the details of repayment of the said loan with the component of interest. The ld. A.R. submitted that the assessee has also given the details of loan in respect of MA Financial Pvt. Ltd. as well as the repayment details. The ld. A.R. submitted that all details were totally ignored by the Assessing Officer as well by the CIT(A).
The ld. D.R. relied upon the assessment order and the order of the CIT(A).
We have heard both the parties and perused all the 7. relevant material on record. At the time of hearing, the assessee has given the detail of both the parties related to the receipt of loans and the repayments as per bank details and the details which are as follows: “DSR IMPEX PVT. LTD. -Received Rs. 30,00,000/- on 13/03/2014 -Received Rs. 10,00,000/- on 13/03/2014 -Received Rs. 32,00,000/- on 13/03/2014 Nandita Shaunak Munshaw, A.Y. 2014-15 -Assessee's bank statement Page 53 of PB -Ledger account Page 57 of PB -Contra ledger account Page 73 of PB -Repaid with interest @ 9% -Repayment PB. Assessee's bank statement Page 55 of Rs. 50,00,000/- on 03/03/2015 Rs.22,00,000/- on 03/03/2015 -Repayment ledger and confirmation ledger account Page 58 & 59 of PB -Bank statement of company Page 74 & 75 of PB. -Certificate of source of source of company -Page 76 of PB. M.A. Financial Services Pvt. Ltd. -Received Rs. 10,00,000/- on 12/03/2014 -Received Rs.18,00,000/- on 12/03/2014
-Assessee's bank statement Page 53 of PB -Ledger account Page 60 of PB -Contra ledger account Page 70 of PB -Repaid with interest @ 9% -Repayment Assessee's bank statement Page 55 of PB Rs.28,00,000/- repaid on 04/03/2015 -Repayment ledger and confirmation ledger account Page 61 & 62 of PB -Bank statement of company Page 71 of PB -Certificate of source of source of company Page 72 of PB.
From the perusal of the relevant pages of the paper book, it appears that the assessee has thoroughly explained the receipt of loans to the extent of Rs. 1,00,00,252/- and also has given the details of repayment of the loan including that of interest thereon. Thus, the CIT(A) was not right in confirming the addition.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 18-02-2026 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 18/02/2026 4 Nandita Shaunak Munshaw, A.Y. 2014-15 a.k. आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद