M/S VATSANA TECHNOLOGIES PVT. LTD.,UTTAR PRADESH vs. ASSISTANT COMMISSIONER OF INCOME TAX, GURGAON

PDF · subscribers
ITA 2172/DEL/2025Status: DisposedITAT Delhi05 December 2025AY 2015-163 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the issues of unsecured loans and notional interest to the AO, granting the assessee one more opportunity to submit necessary documents to prove creditworthiness and the source of advances. The AO was directed to verify these details and pass an order.

What were the facts?

The assessee's appeal concerned additions made by the AO towards unsecured loans, notional interest on advances, and disallowance of interest on unsecured loans. The CIT(A) deleted some additions but confirmed others, including a loan from M/s Arihant AIU-Glass System Pvt. Ltd. and notional interest.

What were the issues?

Whether the assessee could establish the creditworthiness of lenders and the nexus for interest-free advances, and if not, whether additions were justified.

Which sections of the Income-tax Act were involved?

Section 68,Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘A’: NEW DELHI

For Respondent: Shri Krishna Kumar Ramawat, Sr. DR
Hearing: 03/12/2025Pronounced: 05/12/2025

(ASSESSMENT YEAR 2015-16) Asst. CIT, M/s Vatsana Technologies Pvt. Circle-4(1), Gurugon, Ltd., Vs. Haryana. C/o Malik & Co. (Advisors & Advocates-Since 1927), 305/7, Thapar Nagar, Meerut-250001, Uttar Pradesh. PAN-AADCV7329R (Appellant) (Respondent) Assessee by None Department by Shri Krishna Kumar Ramawat, Sr. DR Date of Hearing 03/12/2025 Date of Pronouncement 05/12/2025 O R D E R

PER MANISH AGARWAL, AM:

1.

This appeal is filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-1, Gurugaon (‘Ld. CIT(A)’ in short), dated 29.11.2018 in Appeal No. 630/17-18, A.Y. for AY 2015-16.

2.

None appeared on behalf of the assessee. The Ld. Sr. DR supports the order of the lower authorities and requested for the confirmation of the same.

3.

Heard the Ld. Sr. DR. From the perusal of the facts, it is seen that the addition of Rs2.5,00,000/- was made towards unsecured loan received from M/s Arihant M/s Vatsana Technologies Pvt. Ltd. vs. ACIT AIU-Glass System Pvt. Ltd. and M/s Mysore Finlease Pvt. Ltd. for the reason that assessee has not filed its bank statement and ITR of the lender companies. Further addition of Rs. 2,15,340/- as made towards the notional interest income on interest free advances. Besides this, AO also disallowed the interest on the unsecured loan paid to M/s Mysore Finlease Pvt. Ltd. IN first appeal ld. CIT(A) has deleted the addition towards loan of Rs. 20.00 lacs taken from M/s Mysore Finlease Pvt. Ltd. and further deleted the interest of Rs. 1,87,068/- paid to it. However, as assessee has not able to prove the creditworthiness of the loan taken from M/s Arihant AIU- Glass System Pvt. Ltd. y filing any documents, ld. CIT(A) confirmed the addition of Rs. 5.00 lacs being the loan taken from the said company and further confirmed the payment of interest in such loan. Further, ld. CIT(A) confirmed the addition towards the notional interest as the assessee was not able to prove the nexus between the interest free fund and interest free advances given.

4.

Looking to the entirety of facts it appears that assessee should be provided one more opportunity to file all the necessary documents to establish the creditworthiness of the lender as well source of making interest free advances before the AO. Therefore, in the larger interest of justice, we restored back both the issues to the file of the AO with the directions to the assessee to file all the details before the AO to support of the claims made. The AO is directed to verify the details filed by the assessee and pass the order in accordance with law. With these directions, all the grounds of the appeal taken by the assessee are partly allowed for statistical purposes.

5.

As a result, the appeal of the assessee is partly allowed. Order is pronounced in open court on 05/12/2025.

More judgments on Section 68

All 29,931 judgments and leading authorities on Section 68 →

Recent GST High Court judgments

Search GST case law →