TaxTMI 
TaxTMI 
2026 (8) TMI 1569
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.... out of the assessment order dated 23.12.2017 u/s 147/143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') passed by the ITO, 17(3) New Delhi for AY: 2010-11. 2. Heard and perused the records. Based on the investigation wing report that assessee has taken an entry of Rs. 40,00,000/- from companies under the control of Pradeep Kumar Jindal the entry operator. The assessee's case was reopened and after taking explanation of the assessee addition of Rs. 40,00,000/- was made and the relevant findings of ld. Assessing Officer in para 23 is reproduced below: "23. In view of the above facts & circumstances of the case and the settled legal position, the sum of money received by the assessee company during the year,....
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....on period. 4. That the Ld. AO failed to provide the appellant with a meaningful opportunity for cross-examination of the third parties whose statements were relied upon to make the additions, thereby violating the principles of natural justice. 5. That on the facts and circumstances of the case, the Ld. AO erred in making addition of Rs. 40,00,000 as unexplained cash credit even though the Appellant had borrowed only a sum of Rs. 20,00,000 from the alleged entry providers. 6. That on the facts and circumstances of the case, Ld. AO erred in making addition of Rs. 40,00,000 under section 68 of the Act as unexplained cash credits, despite the appellant having proved identity, creditworthiness, and genuineness of loan....
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.... 147 alleging same to be bad in law as reopening based on borrowed satisfaction, we find that the reasons recorded under section 148 of the Act for reopening assessment is made available at Pg 46 of Paper book, wherein, there is reference of Annexure-A, available at Pg 52 of Paperbook and perusal of same shows that it has been alleged that Rs. 40,00,000/- was borrowed by Appellant during the year under consideration. The annexure shows that only the name and address of certain entities is mentioned without any reference to the transactions entered by the Appellant with any of the stated entities. 6. Factually it can be seen that during AY 2010-11 the Appellant had taken a loan of Rs. 20,00,000 from Parsandi Finance & Leasing Private Limi....
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....g the ledger account of Parsandi Finance & Leasing Pvt. Ltd. @Pg 132 of Paperbook), confirmation from Focus Industrial Resources Ltd. (successor entity pursuant to merger) @Pg 134 of Paperbook), bank statements evidencing receipt (@Pg 161 of Paperbook) and subsequent repayment of the loan (@Pg 150 of Paperbook) through banking channels, and ledger confirmation from the lender @Pg 134 of the Paperbook) corroborating the transaction and reversal of excess payment (Annexures H to K of the Paper Book), were very much there before ld. Tax authorities. 9. Our, attention in this regard was invited to the decisions of ACIT vs. Kind Building Solutions (P.) Ltd. [2026] 186 taxmann.com 977 (Delhi - Trib.)[20-05-2026] {Para 4.1), Deputy Commissioner....
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....elhi High Court in Principal Commissioner of Income-tax (Central) -3 vs. Pavitra Realcon (P.) Ltd. [2025] 481 ITR 663 (Delhi)[29-05-2024] {Para 31}. The repayment of the loan is the strongest evidence of the genuineness of the transaction and negates any inference that unaccounted income was introduced in the guise of a loan. This Hon'ble Tribunal in the case of KTM Impex Private Limited vs. ITO: ITA No.2377/Del/2025 dt.09.01.2026 {Para 5-13} while relying on the decision of Real Innerspring Technologies (P.) Ltd. vs. ACIT [2025] 174 taxmann.com 1130 (Delhi - Trib.)[27-03-2025] {Para 11} has held that when assessee had received loans through normal banking channels, paid interest thereon, and repaid the entire loan amounts through banki....