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Facts
The assessee filed its return declaring a net loss. The AO made an addition of Rs. 14,69,55,000/- under Section 68 of the Income Tax Act as unexplained cash credit from two unsecured loans. The CIT(A) upheld the AO's order.
Held
The Tribunal held that the assessee failed to discharge the burden of proof regarding the identity, genuineness, and creditworthiness of the loan-giving parties, especially after field enquiries revealed the companies did not exist at the given addresses and had negligible share capital and reserves. The addition made by the AO was affirmed.
Key Issues
Whether the assessee discharged the onus under Section 68 by providing confirmations and bank statements for unsecured loans when the lenders' genuineness and creditworthiness were not substantiated and the entities did not exist.
Sections Cited
143(3), 68, 68
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “F”, NEW DELHI
(Asstt. Year : 2012-13) M/s Alvin Reality Pvt. Ltd., vs. DCIT, CIRCLE-1, B-165, Flat-D, Ground Floor, GHAZIABAD Insha Manzil, New Ashok nagar, New Delhi – 110 096 (PAN: AAICA8133D) (Appellant) (Respondent) Appellant by : None Respondent by : Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 22.09.2025 Date of Pronouncement 30.09.2025 ORDER
PER MAHAVIR SINGH, VICE PRESIDENT :
This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), Ghaziabad in Appeal No. 059/2015-16/GZB dated 14.09.2016. Assessment was framed by the DCIT, Circle-1, Ghaziabad for the assessment year 2012-13 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred the Act) vide his order dated 18.3.2015.
The only issue in this appeal of the assessee is as regards to order of CIT(A) confirming the action of the AO in making addition of unsecured loans taken from M/s Abhirati Infrastructure (P) Ltd. and M/s Bridgette Infrastructure (P) Ltd. as unexplained cash credit in total amounting to Rs. 14,69,55,000/-.
The brief facts of the case are the assessee filed its return of income for the assessment year 2012-13 declaring Net Loss of Rs. 4,06,82,842/-. The assessment in this case was completed u/s. 143(3) of the Act vide order dated 18.3.2015 at total income of Rs. 10,58,92,142/- i.e. by making addition of Rs. 14,69,55,000/- under section 68 of the I.T. Act being unsecured loan of Rs. 14,69,55,000/- (Rs. 3,75,75,000/- from M/s Abhirati Infrastructure (P) Ltd. + and Rs. 10,93,80,000/- from M/s Bridgette Infrastructure (P) Ltd. treating it as unexplained, sham, bogus and non- genuine. Against the above, assessee preferred the appeal before the Ld. CIT(A), who vide his impugned order dated 14.09.2016 dismissed the appeal of the assessee. Aggrieved, assessee is in appeal before the tribunal. 3. None appeared on behalf of the assessee, despite issue of notice for hearing. It is noted that since filing of appeal i.e. on 20.03.2017 the matter has been listed on various occasions before the Bench for hearing,
2 | P a g e but almost maximum times, none appeared on behalf of the assessee which shows the deliberate attempt and non-cooperative attitude of the assessee. Hence, we are proceeding, exparte qua the assessee. Ld. DR relied upon the orders of the authorities below.
We have heard the Ld. DR and gone through the facts and circumstances of the case. We noted that during the year assessee has claimed to have received a loan of Rs. 3,75,75,000/- from M/s Abhirati Infrastructure Pvt. Ltd. and Rs. 10,93,80,000/- from M/s Bridgette Infrastructure (P) Ltd). During the course of assessment proceedings, the AO asked assessee to prove the identity, genuineness and creditworthiness of the two companies who have extended loans to the assessee. Assessee furnished copy of confirmation alongwith their copies of bank statement and ITR and claimed that the two are corporate bodies and transactions are through bank thus the onus u/s. 68 has been discharged by the assessee. However, the AO observed that M/s Abhirati Infrastructure Pvt. Ltd had total income of Rs. 1,841/- and M/s Bridgette Infrastructure (P) Ltd), had declared income of Rs. 1,490/-. The AO conducted local enquiries to verify the genuineness of loan through an inspector of these loans extending companies and found that at the addresses given, such companies do not exist. The same facts were confronted to the assessee by 3 | P a g e the AO. The assessee simply stated that the two companies who have extended loans, do not have permanent staff and Director of the company remain out of office and mostly out of station, in search and negotiation of projects. Hence the office remains closed most of the time and requested AO not to draw any adverse inference. Thus, at assessment stage no further evidence were given by assessee to substantiate the creditworthiness of two companies extending loan during the year even when burden of proof was shifted on the appellant after field enquiries by AO in respect of these companies. Even, during appellate proceedings appellant's main contention was that it has already given copy of ITR, bank statements, confirmation to substantiate the loans. However, copies of the audited accounts shows that M/s Abhirati Infrastructure Pvt. Ltd. has a share capital of Rs. 1 lac and reserve the surplus of Rs. 2,188/-. Similarly, the share capital of M/s Bridgette Infrastructure (P) Ltd) is Rs. 1 lac and reserve and surpluses of Rs. 1,778/-, which definitely fail to substantiate the creditworthiness of these loan giving parties. It was reiterated that the assessee failed to discharge the burden of proof shifted on it as a result of field enquiry conducted by AO. In view of the aforesaid factual matrix, in our view the provision of section 68 and the facts of circumstances of the assessee's case, the action of AO making an 4 | P a g e addition of Rs. 14,69,55,000/- u/s 68 of IT Act, 1961 was rightly affirmed by the Ld. CIT(A), which does not need any interference on our part, hence, we uphold the same and accordingly, reject the ground raised by the assessee.