ACIT, CIRCLE-3(1), GURUGRAM, GURUGRAM vs. SUNIL KUMAR, GURUGRAM

ITA 1/DEL/2025Status: DisposedITAT Delhi11 November 2025AY 2022-2310 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Revenue's appeal lacked merit and was dismissed. Regarding the first issue concerning the unsecured loan addition of Rs. 1,51,49,250/- under Section 68, the Tribunal noted that the impugned loans represented the opening balance as on 01.04.2021. Following various judicial precedents, including those cited by the assessee, the Tribunal held that Section 68 cannot be invoked for opening balances, as these represent transactions from prior years. Therefore, the addition made by the AO was not warranted and was deleted. The Tribunal also rejected the Revenue's second substantive ground regarding the Section 41(1) addition of Rs. 3,83,71,515/- for unsubstantiated sundry creditors, noting that the AO treated it as a deemed cessation rather than an actual one, which is a condition precedent as per the Supreme Court's decision in CIT vs. Sugauli Sugar Works (P) Ltd. The Tribunal further clarified that the addition was made because the liability was outstanding for preceding assessment years. The Revenue's third substantive ground concerning the Section 56(2)(vii)(a) addition of Rs. 5,00,000/- for a gift received was also rejected, as the assessee had provided proof of receipt from his niece, supported by a gift deed. The Tribunal explicitly stated that no other ground or argument was pressed. The appeal was dismissed.

What were the facts?

The Revenue has appealed against the order of the CIT(A)/NFAC for Assessment Year 2022-23, which had deleted additions made by the Assessing Officer (AO) under Sections 68, 41(1), and 56(2)(vii)(a) of the Income-tax Act, 1961. The AO had made an addition of Rs. 1,51,49,250/- on account of unexplained unsecured loans, Rs. 3,83,71,515/- on account of unsubstantiated sundry creditors, and Rs. 5,00,000/- as income from other sources on account of a gift received. The CIT(A)/NFAC had deleted these additions. The appeal arises from proceedings under Section 143(3) r.w.s. 144C of the Act.

What were the issues?

1. Whether the deletion of the addition of Rs. 1,51,49,250/- made by the AO on account of unexplained unsecured loan under Section 68 of the Income Tax Act, 1961, read with Section 115BBE, by the Ld. CIT(A) is justified? - Assessee's contention: The addition is unjustified as the majority of the loan amount represented an opening balance from previous years, and for the amount taken in the current year, necessary confirmations and identity proofs were submitted. Additional evidence submitted during appeal, including bank statements and ITRs of lenders, demonstrated creditworthiness and genuineness. Reliance was placed on ITAT Mumbai in ITO vs. Rahul Kantilal Shah, Gujarat High Court in CIT vs. Jagatkumar Satishkumar Patel, and Delhi High Court in CIT vs. Usha Stud Agricultural Farms Ltd. - Revenue's contention: The Ld. CIT(A) erred in deleting the addition. 2. Whether the Ld. CIT(A) erred in admitting additional evidence without seeking a remand report/comments from the AO and using it as a basis for deletion? - Assessee's contention: Not recorded. - Revenue's contention: The Ld. CIT(A) erred in admitting additional evidence without seeking a remand report/comments of the AO and using it as a basis for deleting additions. 3. Whether the deletion of the addition of Rs. 3,83,71,515/- made by the AO under Section 41(1) of the Act on account of un-substantiated sundry creditors by the Ld. CIT(A) is justified? - Assessee's contention: Not recorded. - Revenue's contention: The Ld. CIT(A) erred in deleting the addition. 4. Whether the deletion of the addition of Rs. 5,00,000/- as income from other sources under Section 56(2)(vii)(a) of the Act on account of gift received by the Ld. CIT(A) is justified? - Assessee's contention: Not recorded. - Revenue's contention: The Ld. CIT(A) erred in deleting the addition.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 41(1),Section 56(2)(vii)(a),Section 143(3),Section 144C

AI-generated summary — verify with the full judgment below

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

Before: SHRI SATBEER SINGH GODARA & SHRI S. RIFAUR RAHMAN

For Appellant: CA Sh. Rajat Chaudhary, CA
Hearing: 11.11.2025Pronounced: 11.11.2025

PER SATBEER SINGH GODARA, JM

This Revenue’s appeal for assessment year 2022-23, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1069504506(1), dated 07.10.2024 involving proceedings under section 143(3) r.w.s. 144C of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

2.

The Revenue raises the following substantive grounds in the instant appeal:

“<A,

On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,51,49,250/- made by the AO on account

The order continues below.

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