2026 (4) TMI 243

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....Y. 2017-18. 2. The Revenue has raised following revised grounds of appeal: "1. Whether on the facts of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 10,57,30,847/- for A.Y. 2017-18 on account of unsecured borrowings u/s 68 of the IT Act made by AO though the assessee could not prove the creditworthiness of transactions during the course of assessment proceedings. 2. The appellant craves to be allowed to add, alter, amend, append or delete any of the fresh ground(s) of appeal." 3. Brief facts are that the assessee company filed its original return for A.Y.2017-18 on 06.11.2017, declaring income of Rs. 99,75,480/-, The case was selected for scrutiny during the course of which the assesse....

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....ction 68 of the Act was applicable to the instant AY in respect of share application money and share capital only and it was not applicable for loans and borrowing. Even otherwise, during appellate proceeding the appellant has furnished details in respect of source funds received by the lenders. Further, the assessment orders in the case of these lenders for the instant AY also shows that there is no adverse view about sources of their fund. It is seen that the AO has not pointed out any discrepancy in the details furnished by the appellant. If the AO had any doubt, then he ought to have enquired further in the banking channel to verify the genuineness of sources of these lenders. In the absence of any such enquiry and in the absence of any....

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....g channel from the lenders who have been assessed to income tax cannot be disbelieved and cannot be regarded as accommodation entries. In view of the above, the addition of  Rs. 10,57,30,847/- u/s 68 of the Act made by the AO on account of unexplained cash credit cannot be sustained and the same is deleted. Hence, Ground No.1 to 6 and 9 are allowed." 3.2 Aggrieved with the order of Ld. CIT(A), the Revenue has filed the present appeal before the Tribunal. 4. Before us, Ld. DR has submitted that even though confirmations and other documents were submitted by the assessee, it could not prove the creditworthiness of these lenders. He further pointed out that the lenders had shown very meagre income during the year under consideration....