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Facts
The Assessing Officer (AO) initiated reassessment proceedings under Section 147 and treated unsecured loans of Rs. 50,00,000 as unexplained cash credits under Section 68. The assessee's explanations and replies were considered unsatisfactory, leading to the addition. The CIT(A) upheld the AO's order.
Held
The Tribunal followed its own previous decisions on identical issues involving the same lenders. It held that the assessee had discharged the primary onus under Section 68, and the additions were liable to be deleted in line with the principle of consistency.
Key Issues
Validity of reassessment proceedings under Section 147 and deletion of additions made under Section 68 on grounds of unexplained cash credits and violation of natural justice.
Sections Cited
147, 148, 143(3), 142(1), 68, 144B
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आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by appeal-order dated 02.04.2025 passed by learned Commissioner of Income-Tax (Appeals)-National Faceless Appeal Centre, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 20.09.2021 passed by learned National Faceless Assessment Centre, Delhi [“AO”] u/s 147 r.w.s. 144B of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2013-14, the assessee has filed this appeal on following grounds:
Page 1 of 5 Ashok Airen AY 2013-14 “1. On the facts and circumstances of the case and in law the learned CIT(A) erred in upholding the decision of AO in passing the order u/s 147 of the Income tax Act. The Appellant prays that the said proceedings be directed to be quashed.
On the facts and circumstances of the case and in law the learned CIT(A) erred upholding the decision of AO based on third party material and statement for addition without producing the witness of department for cross examination. The AO failed to appreciate and ought to have held that opportunity of cross examine contemplates ensuring attendance of person whose statement is sought to be used against the Appellant. Accordingly the addition made in violation of natural justice be directed to be deleted.
On the facts and circumstances of the case and in law the learned CIT(A) erred upholding the addition made by Id. AO of Rs.50,00,000 in respect of unsecured loan received during the year by allegedly treating them as unexplained credit under Section 68 of the Act. The Appellant prays that the said addition be directed to be deleted.
The Appellant craves leave to add, amend any or all grounds at the time of hearing.”
The background facts leading to present appeal are such that the AO, taking into account an information received from Investigation Wing of Income-tax Department, issued notice u/s 148 dated 19.03.2020 to assessee to initiate the assessment u/s 147. In response, the assessee filed return on 23.06.2020. Thereafter, the AO issued notices u/s 143(2)/142(1)
which remained uncomplied by assessee. Thereafter, the AO issued a show- cause notice to which though the assessee filed a short reply but the AO considered assessee’s reply as improper. Ultimately, the AO passed assessment-order dated 20.09.2021 u/s 147 r.w.s. 144B after making a total addition of Rs. 50,00,000/- treating the loans taken by assessee from these lenders as unexplained cash credits u/s 68, namely (i) loan of Rs.
20,00,000/- from ‘M/s Jay Jyoti India Pvt. Ltd.’ and (ii) loan of Rs. 30,00,000/- from ‘M/s Jayant Securities and Finance Pvt. Ltd.’ Aggrieved, Page 2 of 5
We have heard learned Representatives of both sides and perused the documents held in case record including the orders of lower-authorities.
Ld. AR for assessee has filed a Written-Synopsis and also made oral arguments. He submitted that the assessee has filed all required documents to AO to establish the three ingredients of section 68, namely the identity and creditworthiness of the lenders and the genuineness of loans taken.
Copies of these documents are also filed in Paper-Book at Pages 7 to 51. Ld.
AR submitted that these documents remain uncontroverted by AO. He submitted that the assessee has discharged primary onus cast upon it to satisfy the requirement of section 68. However, the AO has made impugned additions on an understanding that the lenders were shell companies operated by one accommodation entry provider ‘Shri Sharad Darak’. He submitted that the ITAT, Indore Bench has already tested this very issue raised by AO in other cases and after due consideration, deleted the additions made by assessing authorities in the hands of other assessees in respect of loans taken by them from the very same lenders. Ld. AR has filed a list of such decisions in his Case Law Paper-Book and made a particular mention of following decisions:
(i) Shri Sanjay Shukla Vs. ACIT, Central Circle-2, Indore, for AY 2013-14, order dated 15.03.2022 Page 3 of 5
43/Ind/2022, order dated 31.05.2023 (iii) M/s Global Realcon Pvt. Ltd. Vs. ACIT (Central)-1, Indore, IT(SS)A No.
170 to 174/Ind/2020.
Per contra, Ld. DR for revenue supported the orders of lower- authorities stating that the lenders were shell companies controlled by an accommodation entry provider ‘Shri Sharad Dark’ as accepted by ‘Shri Sharad Dark’ in the statements before Investigation Wing. Therefore, according to Ld. DR, the AO is correct in treating the loans taken by assessee from lenders as unexplained cash credit u/s 68 and make impugned additions. He prayed to uphold the additions made/upheld by lower authorities.
We have considered rival submissions of both sides and perused the documents held on record including the orders of lower-authorities. We have also perused the case decisions relied by Ld. AR. After a careful consideration, we find that the ITAT, Indore has already tested the loans taken by various other assessees from the very same lenders and taken a conclusion to delete the additions made by AO accepting that all ingredients of section 68 were satisfied. We also find that the present case of assessee pertains to AY 2013-14 and the case of Shri Sanjay Shukla (supra) cited by Ld. AR was also of same AY 2013-14 and the facts giving rise to present controversy are same. Respectfully adopting the consistency, we are inclined to hold that the impugned loans taken by assessee satisfied the ingredients
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Resultantly, this appeal is allowed.
Order pronounced in open court on 03/02/2026
Sd/- Sd/-
(PARESH M.JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 03/02/2026 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore
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