ANUPAM MITTAL,AGRA vs. ITO WARD 2(1)(1), AGRA, AGRA

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH ‘DB’ AGRA

(Through Physical/Virtual Hearing)

BEFORE SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER

ITA No.233/Agr/2024 [Assessment Year: 2018-19]

Anupam Mittal, ITO, Prop. M/s R B Trade Links, Ward-2(1)(1), Branch At Shop No.12/A/8, Vs Aykar Bhawan, Sanjay Place, Agra, Chaubey Ji ka Phatak, Kinari Uttar Pradesh-282002 Bazar Agra, Uttar Pradesh-282003 PAN-AMVPM7971M Appellant Respondent

Appellant by Shri Anurag Sinha, Adv. Respondent by Shri Shailender Srivastava, Sr. DR,

Date of Hearing 22.04.2025 Date of Pronouncement 18.07.2025

ORDER PER BRAJESH KUMAR SINGH, AM,

This appeal by the assessee is directed against the order of the

National Faceless Appeal Centre, Delhi/Ld. CIT(A) dated 11.05.2024,

arising out of assessment order passed u/s 143(3) r.w.s. 143(A) &

143(3B) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’),

dated 25.03.2021 for Assessment Year 2018-19.

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Rs.2,40,000/- made on account of disallowance of payment of interest) without properly appreciating the facts brought on record by the Appellant during the course of assessment and appellate proceedings. 2. That the learned Commissioner of Income tax (Appeals) (NFAC) has grossly misconceived the provisions of section 68 of the Income tax Act, 1961 through which the onus automatically shifts upon the Assessing Officer to make independent enquiry about the genuineness of the loans when necessary information about the lender is provided by the Assessee. 3. That the learned Commissioner of Income Tax (Appeals) (NFAC) has miserably failed to appreciate the case laws relied upon by the Appellant. 3. Brief facts of the case: The assessee was engaged in the business of

silver and gold trading during the year under consideration. The

Assessing Officer noted that the assessee had received substantial loan

from unsecured creditors amounting to Rs.71,08,000/- (Rs.163,73,000-

Rs.92,65,000/-). The Assessing Officer asked the assessee to prove the

identity, creditworthiness and genuineness of the transaction with

respect to the said five unsecured creditors. The Assessing Officer noted

that the assessee provided the details of land and ITR of the lenders but

failed to establish creditworthiness of the lenders. On 01.03.2021, the

Assessing Officer issued questionnaire asking the assessee to explain the

justification for creditworthiness/capacity of the unsecured lenders and

to provide interest expenditure for each lender. Prior to this, the

Assessing Officer had observed that the lent amount by the lenders

varied between 156.21% to 640.84% of the total income shown by the

lenders in their respective return as tabulated on page no.2 of the

assessment order, which is reproduced as below:-

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3.1. According to the Assessing Officer with remarks noted against the

said lender in the said show-cause notice remained unanswered by the

assessee and further notice u/s 133(6) of the Act issued to the said

creditors was not answered. Taking note of the fact that the assessee had

provided the ITRs PAN, ledger to establish the genuineness of the loan

but he observed that these are merely corroborative documentary

evidences viz. KYC forms, loan confirmations, or copy of bank statement

which could not make a sham transaction as genuine. The Assessing

Officer also noted the fact that the all the money trail which became

obvious was that the money was first deposited in the creditors account

and then the lending was made to the assessee and thus such

transaction does not prove the creditworthiness of the unsecured lender.

Thereafter, the Assessing Officer relied upon the various case laws and

ultimately held that the assessee had failed to prove the creditworthiness

4 ITA No.233/Agr/2024

of the respective creditors. The Assessing Officer also noted that creditors

were found to be shell/jamakharchi company and added a sum of

Rs.71,08,000/- u/s 68 r.w.s. 115BBE of the Act. Further, the Assessing

Officer disallowed the interest of Rs.2,40,000/- paid on such loan of

Rs.71,08,000/-.

an appeal before the ld. CIT(A). The Ld. CIT(A) as per his observation in

para no.5 of his order confirmed the addition of Rs.71,08,000/- u/s 68 of

the Act and dismissed the appeal of the assessee, which is reproduced as

under:-

“5. During the course of faceless appellate proceedings, I have gone through the facts of the case, submission of the appellant, assessment order of the assessing officer and material available on records. It is seen that the AO has passed the assessment order wherein an addition of Rs. 70,02,968/- was made for unexplained cash credit under section 68 of the Act. The appellant has failed to prove the creditworthiness of the creditors. The onus was on the appellant to prove the creditworthiness of the creditors but the appellant failed to prove the same in this regard. The creditors have been found to be shell companies. The documents produced by the appellant merely prove the case of the appellant superficially, which is far from the reality or truth. Therefore, it is unbelievable to accept the contention of the appellant that said persons or creditors were having creditworthiness to advance any loan to the appellant. It is crystal clear that the appellant has not adduced any sufficient evidence neither before the AO nor during the appellate proceedings in this regard. Thus, the addition made by the AO of amounting to Rs. 71,08,000/- on account of unexplained cash credit under section 68 of the I.T. Act, 1961 is hereby confirmed and the ground no. 1,2 and 6 are decided in negative and against the appellant.”

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4.1. Similarly, the ld. CIT(A) also confirmed the disallowance of interest

of Rs.2,40,000/- on the loan of Rs.71,08,000/- by observing in para

no.5.1 and 5.2 as under:-

5.1 In the ground no. 3, the appellant has challenged the disallowance of interest to the extent of Rs. 2,40,000/-. In this regard, the submission of the appellant is reproduced as under:

"This loan was interest bearing loan and interest is paid to lender after deduction of TDS and she has shown interest income in her return filed to Income Tax, since the loan is genuine and proved the interest cannot be added.

From the perusal of above, your honor will appreciate that all the lenders are assessed to income tax, there identity, capacity, source and credit worthiness is proved from their income tax return along with computation of income, bank account/passbook. The assessee has also proved genuineness of transaction and therefore the assessee has discharged his onus lay upon her.

5.2 During the course of appellate proceedings, it is seen from the assessment order that the appellant has earned interest of Rs. 2,40,000/-on the loans of Rs. 71,08,000/- The appellant has not produced any sound reasons with regard to it. The appellant has failed to satisfy the belief of the Assessing Officer, Thus, Ido not find any infirmity in the addition made by the assessing officer and accordingly the addition of Rs. 2,40,400/-, is hereby confirmed & the ground no. 3 is decided in negative and against the appellant."

appeal before us.

synopsis and submitted that all the documents from serial No.1 to 3 were

also filed before the authorities below and no fresh documents was filed

6 ITA No.233/Agr/2024

in this paper book. The index of the said paper book is reproduced as

under:-

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6.1. Relying upon the above documents and the submissions, the ld.

AR submitted that the ld. CIT(A) has summarily rejected the above

evidences and the submissions, which was placed before him. The ld. AR

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further submitted that the order of the Ld. CIT(A) may be set-aside and

the addition made by the Assessing Officer should be deleted.

on record. On perusal of the assessment order, it is seen that the AO

passed the assessment order and made the addition of Rs.71,08,000/-

being unsecured loan received from five persons u/s 68 of the Act on the

ground that the creditworthiness and capacity of the said lender were not

proved. Moreover, the AO also noted that the notice u/s 133(6) of the Act

issued to the creditors were also not answered. The Ld. CIT(A) confirmed

the above findings of the AO without making any further enquiry or by

calling any remand report from the AO in this case in view of the fact

that the queries of the show-cause of the AO remained unanswered,

whereas the documents and explanation as listed in the above ‘Index’

and case laws cited in the synopsis placed at pages no.1 to 11 of the

paper book were filed before the Ld. CIT(A). Moreover, the assessee filed

two tabular charts (placed on page no.14 and 15 of the paper book) in

which, it was claimed that loan of Rs.13,50,000/- added as received from

Shri Anil Kumar Agarwal was an old loan and therefore no addition of the

same could have been made by the Assessing Officer during the year.

Further, it is stated in the said chart that there is a discrepancy in the

amount considered as unsecured loan taken from the above five parties

and also in the total quantum of fresh unsecured loan received during

this year. As per the chart on page no.14 of the paper book, total fresh

loan taken during the year was Rs.80,29,300/- and there were also

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repayments amounting to Rs.11,61,300/- during the year. Moreover, the

assessee in his written submission before the Ld. CIT(A) (placed at page

no.13-18) had given detailed explanation about the source of all the five

lenders which inter-alia includes on illustrative basis the claim of receipt

of capital of Rs.9 lakhs by Shri Ravi Kumar Agarwal from his partnership

firm for advancing the unsecured loan of Rs.10,29,300/- to the assessee.

Similarly, it is claimed that Ms. Asha Devi Agarwal had encashed her

FDRs (maturity value of Rs.20,60,798/-), who had advanced an

unsecured loan of Rs.20 lakhs to the assessee. The above explanation

and the documents filed by the assessee has not been dealt by the Ld.

CIT(A) person-wise while confirming the addition and dismissing the

appeal of the assessee.

8.1. However, it is seen that the assessee did not comply before the

Assessing Officer during the assessment proceedings and the ld. CIT(A)

has not passed a speaking order in confirming the addition of the

Assessing Officer and did not give any specific reasons for rejecting the

explanation and the documents submitted by the assessee. Therefore, in

the given facts of the case, the above submissions of the assessee and

documents relied upon by the assessee requires verification by the

Assessing Officer. Therefore, in the interest of justice, we, set-aside the

order of the Assessing Officer as well as the Ld. CIT(A) and restore the

addition of Rs.71,08,000/- made u/s 68 of the Act and the disallowance

of interest amounting to Rs.2,40,000/- to the file of the Assessing Officer

for fresh adjudication after giving a reasonable opportunity of being

heard to the assessee in light of the above observations and as per law.

10 ITA No.233/Agr/2024

Order pronounced in the open court on 18th July, 2025.

Sd/- Sd/- [SUNIL KUMAR SINGH] [BRAJESH KUMAR SINGH] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 18.07.2025. f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra