TaxTMI 
TaxTMI 
2026 (8) TMI 280
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.... ITA No.1139/Del/2026 [Revenue's appeal] 2019-20 07.11.2025 28.03.2024 147 of the I.T Act. 2. ITA No.9054/Del/2025 [Assessee's appeal] 2019-20 - do - - do - - do - 3. ITA No.1140/Del/2026 [Revenue's appeal] 2020-21 - do - - do - - do - 4. ITA No.9055/Del/2025 [Assessee's appeal] 2020-21 - do - - do - - do - 5. ITA No.1141/Del/2026 [Revenue's appeal] 2021-22 - do - 10.02.2023 143(3) of the I.T.Act 6. ITA No.9056/Del/2025 [Assessee's appeal] 2022-23 - do - 28.03.2024 - do - 7. ITA No.1142/Del/2026 [Revenue's appeal] 2022-23 - do - - do - - do - 2. All captioned seven (07) appeals filed by the Revenue and the assessee are having common issues, therefore, all appeals filed by the Revenue and the assessee are decided by a common order for the sake of convenience. 3. First of all, the Grounds of appeal taken in all the appeals filed by the Revenue and the assessee are reproduced as under:- ITA 1139/DEL/2026 [Assessment Year: 2019-20] [Revenue's appeal] 1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in dele....
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....therefore, the reassessment proceeding initiated along with assessment order passed are liable to be quashed and CIT(A) erred in not holding so. 4. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the Ld. Assessing Officer to the extent of Rs. 1,06,582/- on account of disallowance of penalty/late fees u/s 37 of the Act. 5. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the Ld. Assessing Officer to the extent of Rs. 6,92,000/- on account of alleged unexplained cash deposits u/s 69A of the Act. 6. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is contrary to the provisions of section 148B of the Income Tax Act, 1961 and CIT(A) erred in not holding so." ITA 1140/DEL/2026 [Assessment Year: 2020-21] [Revenue's appeal] 1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 2,59,64,342/- made u/s 68 of the Income-tax Act, 1961, on account of unexplained advances from customers, without appreciating that t....
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....essing officer is contrary to the provisions of section 148B of the Income Tax Act, 1961 and CIT(A) erred in not holding so." ITA 1141/DEL/2026 [Assessment Year: 2021-22] [Revenue's appeal] 1. "The Ld. CIT(A) erred in deleting the addition of Rs. 9,43,16,450/- made u/s 68 in respect of sundry creditor M/s Richfield Industries Pvt. Ltd., ignoring the fact that the assessee failed to establish the identity, creditworthiness and genuineness of the credit. 2. The Ld. CIT(A) erred in deleting the addition of Rs. 1,76,67,419/- made u/s 68 on account of advances from customers without appreciating that the nature and genuineness of such credits remained unsubstantiated. 3. The Ld. CIT(A) erred in deleting the addition of Rs. 18,20,000/- made u/s 69C on account of unexplained credit card payments, without properly appreciating the information available from third-party sources indicating unexplained expenditure. 4. The Ld. CIT(A) erred in deleting the addition of Rs. 15,00,000/- made u/s 68 in respect of unsecured loans, ignoring the absence of confirmations, lender details and supporting documentary evidence. 5. The Ld. CIT(A) erred in de....
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....ing the addition made by the Ld. Assessing Officer to the extent of Rs. 10,50,000/- on account of alleged unexplained cash found in locker as unexplained money u/s 69A of the Act. 5. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the Ld. Assessing Officer to the extent of Rs. 8,79,500/- on account of alleged unexplained cash found as unexplained money u/s 69A of the Act. 6. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the Ld. Assessing Officer to the extent of Rs. 1,37,730/- on account of disallowance u/s 37(1) of the Act. 7. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is contrary to the provisions of section 148B of the Income Tax Act, 1961 and CIT(A) erred in not holding so." 4. First we take appeals filed by both the parties i.e. Revenue and the assessee for assessment Year 2019-20. ITA 1139/DEL/2026[Revenue's appeal] ITA 9054/DEL/2025 [Assessee's appeal] [Assessment Year: 2019-20] 5. Brief facts of the case are that the assessee is an individual and a se....
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....d. CIT DR submits that AO had observed that the assessee has failed to prove the creditworthiness of the parties who had given advances to the assessee by not filing their ITR, confirmations and other particulars. Ld. CIT DR further submits that Ld. CIT(A) has accepted the submissions filed by the assessee and the evidences produced without providing opportunity to the AO nor they were confronted to the AO therefore, the entire addition made by the AO deserves to be restored. 10. On the other hand, Ld.AR for the assessee vehemently supported the order of Ld. CIT(A) and submits that during the course of assessment proceedings, AO has asked the assessee about the details of outstanding balances, which was duly replied by the assessee and detailed chart of the Sundry creditors was filed alongwith the letter in reply to show cause notice dated 13.03.2024 filed on 16.03.2024, placed at page 72 to 76 of the Paper Book and reproduced by ld. CIT(A) in its order. Ld. AR submits that assessee was having regular transactions of supply of goods with all these parties and had received total sum of INR 16.00 crores as advance from them during the year out of which INR 14,76,22,549/- were adju....
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....e details and submission given by the appellant before the AO included name and address of the parties, their PAN, details of opening balance, sales, amount received during the year and their closing balance. The AO has not pointed out any specific discrepancy or adverse remarks in respect of any of the party. As a matter of fact, the AO has accepted all the transactions with the parties but made addition of closing balance which is without any rationale. These amounts are not the loans or any other form of cash credit. These are amount received during ordinary course of business and sales of goods. The AO has not pointed out any discrepancy in respect of any of the party. The remarks of the AO that current status of advances was not furnished is also not correct. 14. Although, the AO has not asked for the current status, however, it is a matter of record that the AO has himself passed assessment order for subsequent order i.e. A.Y. 2020-21, Α.Υ. 2021-22 & Α.Υ. 2022-23 in which also the details of advances were furnished. In my considered opinion, the AO was not justified in applying provisions u/s 68 in respect of trade advances. The AO has acc....
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....the sum so credited may be charged to income-tax as the income of the assessee of that previous year. The expression "the assessee offer no explanation" means where the assessee offer no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee. It is true the opinion of the Assessing Officer for not accepting the explanation offered by the assessee as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. The opinion of the Assessing Officer is required to be formed objectively with reference to the material available on record. Application of mind is the sine qua non for forming the opinion. 14. In the instant case, as observed above, the assessee has filed all the details of the parties and the AO has accepted the sales made to them and further the amount of advances received and only treated the closing balances as unexplained. Before us, except retreating the allegations made by the AO, Revenue has failed to controvert the findings of Ld. CIT(A) which are very specific and made after considering the fact that sales have regularly been ma....
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....by the Revenue is dismissed and order of ld. CIT(A) is sustained on this issue. 19. Ground of appeal No. 3 raised by the Revenue is with respect to the deletion of addition of INR 8,50,000/- made u/s 69A of the Act out of the total addition of Rs. 15,42,000/- made by the AO. The assessee is also in appeal against the confirmation of the addition of INR 6,92,000/- for which Ground of appeal No.5 was taken by the assessee. Since the Grounds of appeal taken by the Revenue and by the assessee are for similar issue therefore, they are taken together. 20. Before us, Ld.AR for the assessee submits that during the course of assessment proceedings, assessee has filed the copy of the cash book for the year under appeal wherein there was opening balance of INR 11,96,028/- and assessee has made cash withdrawals of INR 8,50,000/- from the bank accounts thus the immediate source of deposits was duly explained. Ld. AR submits that ld. CIT(A) though has accepted this factual position however, on assumption and presumptions, has sustained the addition of INR 6,92,000/- ignoring the fact that INR 11,96,028/- was available with the assessee brought forward from the previous year and was duly di....
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....en interest free and assessee has failed to establish the creditworthiness of these companies who both have declared losses in their return of income filed therefore the loans taken from them were treated as unexplained and addition was made u/s 68 of the Act. 25. Ld. CIT DR for the Revenue submits that AO in para 13 of the assessment order has clearly observed that assessee has failed to prove the creditworthiness of the parties. Both the companies have filed their return of income wherein they were having losses and despite the facts that both the companies are in loss, no interest was charged on the loan given to the assessee which is very unusual and against the business interest. He, therefore, submits that the AO has rightly made the addition which deserves to be restored. 26. On the other hand, ld.AR for the assessee submits that during the course of assessment proceedings, assessee has filed confirmations of both the lenders, their ITRs and their financial statements. Ld.AR submits that copies of the bank statements of both the lenders were filed to prove that transactions as genuine and both the parties have sufficient creditworthiness as there were sufficient funds ....
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....ed if he proves the identity of the Creditors, genuineness of the transaction and creditworthiness of the creditors. In the present case, the appellant submitted before the AO the following documentary evidences: - Documents M/s M.G. Metalloy Pvt Ltd - Confirmation of Account of the Loan creditor - ITR acknowledgement of the loan creditor - Copy of bank statement of the loan creditor - Balance Sheet of the loan creditor M/s Sincerely Finance and Investment Pvt Ltd - Confirmation of Account of the Loan creditor - ITR acknowledgement of the loan creditor - Copy of bank statement of the loan creditor - Balance Sheet of the loan creditor 24. The AO has not pointed out any discrepancy in the above documentary evidences submitted by the appellant. There can be no dispute about the identity of the loan creditors. The loan creditors are companies incorporated under the Companies Act. The AO has not even disputed the identity of the creditors. As regards the creditworthiness of the creditors, the creditors have duly confirmed about giving loans to the company. As regards the reason gi....
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....espect of the loan creditors. The loan creditors are not alleged to be accommodation entry providers. In view of the above, the addition of Rs. 90,00,000/- made by the AO cannot be held to be justified and, therefore the same is hereby deleted." 28. It is observed that ld. CIT(A) has appreciated that the assessee has filed all the relevant details and thus discharged the burden casted upon it u/s 68 of the Act to prove the genuineness of the transactions and creditworthiness of both the lenders. It is further observed that the loans were given out of the regular bank accounts where sufficient balances were available when the loans were given to the assessee. 29. The Hon'ble Supreme Court in the case of Orissa Corporation Ltd. reported in [1986] 159 ITR 78 (SC) has held that when the assessee furnishes names and addresses of the alleged creditors and the GIR numbers, the burden shifts to the Department to establish the Revenue's case and in order to sustain the addition the Revenue has to pursue the enquiry and to establish the lack of creditworthiness and mere non-compliance of summons issued by the Assessing Officer under section 131, by the alleged creditors will not be....
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....26 [Assessment Year 2020-21] [Revenue's appeal] 39. Ground of appeal No.1 raised by the Revenue is with respect to the deletion of addition of INR 2,59,64,342/- made u/s 68 on account of advance received from the customers held as unexplained. 40. Before us, both the parties have fairly admitted that this issue is identical to the issue raised in revenues appeal for AY 2019-20 in ITA No.1139/Del/2026 wherein the revenue has challenged the deletion of addition of INR 2,45,11,712/- made. While deciding the appeal of the revenue herein above, we uphold the order of the ld. CIT(A) and dismissed the Ground of appeal No. 1 raised by the Revenue in ITA No.1139/Del/2026 for Assessment Year 2019-20. 41. Facts being identical as admitted by both the parties therefore, by respectfully following the observations made in ITA No.1139/Del/2026 for AY 2019-20 while dismissing the appeal of the Revenue which are Mutatis Mutandis applied to the present case also. Thus, Ground of appeal No.1 raised by the Revenue is dismissed. 42. Ground of appeal No.2 of the Revenue is with respect to the deletion of disallowance of INR 2.00 Lakhs made on account of interest on housing loan claimed u/....
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....ofession" with the income declared under other heads of income and was carry forward to next year. It is further observed that ld. CIT(A) has already upheld the disallowance of INR 3.35 Lakhs u/s 40(a)(ia) of the Act which is to be reduced from the loss carry forward to next year. Since no separate expenditure was claimed therefore, there is no occasion for the AO for making separate disallowance of the same. Under these facts and circumstances of the case, we find that no error in the order of Ld. CIT(A) who has rightly deleted the disallowance which was claimed as deduction out of the total income for the year under appeal. However, we are in agreement with the observations of ld. CIT(A) who has rightly upheld the disallowance @ 30% of the total rent paid u/s 40(a)(ia) of the Act without making TDS which is to be reduced from the business loss carried forward to next year. Accordingly, we uphold the order of ld. CIT(A) and dismissed Ground of appeal No.3 raised by the Revenue. 47. Ground of appeal Nos. 4 & 5 raised by the Revenue are general in nature hence, not adjudicated. 48. In the result, appeal of the Revenue is dismissed. 49. Now we take appeal of the assessee in ....
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....The addition was made by the AO on the allegation that no details were filed by the assessee with respect to the transactions with M/s. Richfield Industries Pvt. Ltd. and neither any reply was filed by the said party in response to the notice issued u/s 133(6) of the Act by the AO. Thus, the AO had concluded that assessee has failed to establish the identity as well as creditworthiness of the suppliers and made the addition u/s 68 of the Act. It was the claim of the assessee that out of the addition made of INR 9,43,16,450/-, a sum of INR 8,42,46,710/- was the opening balance and there was increase of INR 1,00,69,740/- during the year under appeal. It was further claimed by the assessee that in immediately preceding year, verification of the purchases made from the said party of more than INR 19.60 crores was done by the AO and after considering the facts and the replies filed had accepted the transactions as well as the closing balance of INR 8.42 crores. The assessee further claimed that online reply was filed on 23.12.2022 which skipped the attention of the AO who had wrongly observed that assessee has not made any compliance. 58. It is observed that ld. CIT(A) had appreciate....
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....ion made which order is hereby, upheld. Accordingly, Ground of appeal No.1 raised by the Revenue is dismissed. 60. Next Ground of appeal No.2 raised by the Revenue is with respect to the deletion of addition of INR 1,76,67,419/- made u/s 68 of the Act on account of advance received from the customers. 61. Under identical circumstances by making similar observations, AO has made the addition of outstanding balances of advances received during the year which were deleted by ld. CIT(A) and such order of ld. CIT(A) was upheld by us while deciding the appeal of the assessee for AY 2019-20 in ITA No. 1139/Del/2026. Facts being identical in this year also and which fact is fairly admitted by both the parties, thus, by following the aforesaid observations in ITA No. 1139/Del/2026 for AY 2019-20 which are Mutatis Mutandis applicable to this Ground of appeal, thus the Ground of appeal No. 2 raised by the Revenue is dismissed. 62. Ground of appeal No.3 raised by the Revenue is with respect to the deletion of addition of INR 18.20 Lakhs made u/s 69C of the Act on account of unexplained credit card payments. 63. Heard the contention of both the parties at length and perused the mate....
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....nt ignoring the fact that addition of the same amount was already made in AY 2018-19. Ld. CIT(A) after appreciating these facts has deleted the addition which order is hereby, upheld. The Ground of appeal No.3 raised by the Revenue is dismissed. 67. Ground of appeal No.5 raised by the Revenue is with respect to the deletion of addition of INR 12,23,686/- made on account of difference between the purchases reflected in GST/Insight Portal. 68. Heard the contention of both the parties at length and perused the material available on record. The AO has made the addition by observing that the assessee has shown purchase of INR 63,47,921/- as against which as per Insight Portal, GST purchases were shown at INR 75,71,607/- and since the difference was not explained by the assessee therefore, he made the addition of INR 12,23,686/- as unexplained expenditure u/s 69C of the Act. 69. Before us, it was explained by the assessee that the amount reported in GST Portal is inclusive of all the purchases made by the assessee on which GST is paid whether it is of the goods traded or purchases of fixed assets or payment of expenses. The assessee also filed a re-conciliation statements which ....
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....132 of the Act, total cash of INR 14,79,500/- was found from the possession of the assessee for which it was explained by the assessee that it was recorded in the regular book and also out of the saving of the assessee and his family members. Out of the total cash found, a sum of INR 6.00 Lakhs being found recorded in the books of accounts was released and balance of INR 8,79,500/- was seized. The AO in absence of any satisfactory explanation had made the addition of the entire amount. 79. In first appeal, ld. CIT(A) has deleted the addition of INR 6.00 Lakhs against which the revenue is in appeal and the assessee is in appeal against the confirmation of addition of INR 8,79,500/-. 80. Since assessee has not pressed this Ground of appeal therefore, Ground of appeal No.2 raised by the assessee is dismissed. With respect to the ground raised by the Revenue of deletion of addition of INR 6.00 Lakhs, ld. CIT DR submits that the assessee has failed to give any satisfactory explanation therefore the AO has rightly made the addition of the total cash found. Whereas it was the claim of the assessee that since the cash of Rs. 6.00 lacs was duly recorded in the books of accounts as on ....
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....addition of INR 13,15,942/- made on account of unexplained investment in jewellery u/s 69B of the Act. 87. Brief facts of the case are that total jewellery worth of INR 1,78,75,757/- having gross weight of 2491.940 Grams was found during the course of search out of our jewellery of INR 13,15,942/- was seized. As per AO, the benefit of CBDT Instruction No.1916 was allowed according to which total 2200 Grams jewellery was held as explained and addition was made for the remaining jewellery which was confirmed by ld. CIT(A). 88. It was the claim of the assessee that in the total 2200 Grams of jewellery held as explained in terms of CBDT instruction No. 1916, 500 Grams jewellery of Smt. Deepa Bhardwaj was also taken. Ld.AR submits that Smt. Deepa Bhardwaj owned 2500 Grams jewellery in support of the same, our attention is invited to the copy of her Wealth Tax assessment placed at pages 79 to 81 according to which total wealth of Smt. Deepa Bhardwaj was assessed at INR 60,00,000/- comprising of 2500 Grams gold. Ld.AR submits that once the AO himself has accepted that Smt. Deepa Bhardwaj has having 2500 Grams gold jewellery, credit of only 500 Grams was given. Under these circumstan....