ACIT vs Corporate Infotech Pvt. Ltd

PER M. BALAGANESH, A. M.:

The appeal in ITA No.5658/Del/2025 for AY 2020-21, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 14.07.2025 against the order of assessment passed u/s 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.03.2025 by the Assessing Officer, ACIT, Circle-4(2), Delhi (hereinafter referred to as ‘ld. AO’).

The only issue to be decided in this appeal is as to whether the Learned CIT(A) was justified in deleting the addition made under Section 68 of the Act in respect of loan received from two parties in the facts and circumstances of the instant case. The interconnected issue involved therein is whether the Learned CIT(A) was justified in deleting the disallowance of interest made under Section 69C of the Act on the aforesaid loans.

We have heard the rival submissions and perused the materials available on record. The Assessee Company is engaged in the business of trading in computer hardware and software and also provides maintenance services. The return of income for the assessment year 2020-21 was filed by the Assessee declaring total income of Rs 6,47,94,530. The case of the Assessee was sought to be reopened under Section 147 of the Act based on the information received from Investigation Wing that during the course of search conducted in the case of M/s K K Spun India Ltd, it was noticed that one Shri Aditya Jain had provided accommodation entries through his companies / firms and Assessee Company had obtained accommodation entries from Shri Aditya Jain. The Assessee had availed loans from the following parties:-

During the course of assessment proceedings, the Assessee was directed by the learned AO to prove the three ingredients of Section 68 of the Act in respect of the aforesaid two loans. In response, the Assessee furnished the following documents before the learned AO:-

The learned AO issued notice under Section 133(6) of the Act to the lenders and the lenders replied directly before the learned AO and confirmed the entire loan transactions. Despite this, the learned AO proceeded to treat the amount of loan received from two parties in the sum of Rs 3,10,00,000 as unexplained cash credit under Section 68 of the Act on the ground that Assessee could not prove the source of funds from which the lenders have given loan to the Assessee. Correspondingly, the Learned AO also added the interest component on the aforesaid two loans in the sum of Rs 5,97,822 as unexplained expenditure under section 69C of the Act.

The Learned CIT(A) observed that Assessee by furnishing the aforesaid documents had duly discharged its initial onus before the Learned AO and the lenders had also duly responded to the notice issued under Section 133(6) of the Act directly before the Learned AO by duly confirming the transactions with the Assessee. The Learned CIT(A) also noted that interest was paid on the aforesaid loans after due deduction of tax at source and the loans were repaid by the Assessee in subsequent years. The Learned CIT(A) also noted that the loans were repaid by the Assessee before the case was sought to be reopened. The Learned CIT(A) also noted that the lender companies are regularly assessed to income tax. None of the aforesaid factual findings could be controverted by the revenue before us by bringing on record contrary evidences, except reiterating the contentions of the assessment order. Hence, we do not find any infirmity in the order passed by the Learned CIT(A) granting relief to the Assessee. Accordingly, the grounds raised by the revenue are dismissed.

In the result, the appeal of the revenue is dismissed.