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Judgment
PER ANUBHAV SHARMA, JM:
These appeals preferred by the Revenue against the common orders of the Ld. Commissioner of Income Tax (Appeals)-29, Delhi (hereinafter referred to as the First Appellate Authority or ‘the ld. FAA’ for short) in appeals filed before him against the orders of the ld. Assessing Officer (hereinafter referred to as the Ld. AO, for short) passed u/s 143(3) r.w.s 147 of the Income-tax Act, 1961 (hereafter referred to as ‘the Act’). Further details of the orders of the lower authorities are as under: -
| ITA No. & AY | Ld. FAA who passed the appellate order | Appeal No. & Date of order of the Ld. FAA | AO who passed the assessment order & Date of order |
| 8918/D/25 2018-18 | CIT(A)-29, Delhi | DIN & Document No : ITBA/APL/S/91/2025-26/1080589235(1) Dated 10.09.2025 | DCIT, CC-28 Dated 22.03.2025 |
| 8919/D/25 2019-20 | CIT(A)-29, Delhi | DIN & Document No : ITBA/APL/S/91/2025-26/1080589015(1) Dated 10.09.2025 | DCIT, CC-28 Dated 22.03.2025 |
On hearing both sides we find that the issue involved in the two appeals arises out of additions made on account of alleged bogus unsecured loans received from M/s Dreamland Buildshoppe Pvt. Ltd. and ld. DR has relied the grounds which are quite argumentative in nature and for convenience we reproduce the same.
ITA No. 8918/Del/2025 AY: 2018-29
“1.The Ld. CIT(A) erred in deleting the addition of Rs.14,49,50,000/-On account of bogus unsecured loans as the assesse had failed to prove the identity, genuineness and creditworthiness of the creditor i.e. M/s Dreamland Buildshoppe Pvt. Ltd.
2.The Ld. CIT(A) erred in deleting the addition of Rs.14,49,50,000/-on account of bogus unsecured loans received by the assessee as no business was being done from the premises of the M/s Dreamland Buildshoppe pvt. Ltd, which has given the loan to assessee during the AY 2018- 19. The company was found to be paper company on physical verification by this office. Thus, identity, genuineness and creditworthiness of the company from whom unsecured loan taken by the assessee was not proved.
3.The Ld. CIT(A) erred in deleting the addition of Rs.14,49,50,000/- on account of bogus unsecured loans by ignoring the judgement of Kolkata high Court in BST Infratech where it is held that mere routing of funds through banking channel does not make it a genuine transaction.
4.The Ld. CIT(A) failed to apply the statutory mandate of Section 68, particularly the assessee's burden to prove identity of lender, creditworthiness, and genuineness of the transactions. When the lenders are paper entities with no financial capacity, the deletion of addition is contrary to law laid down by the Hon'ble Supreme Court in PCIT v. NRA iron & Steel Pvt. Ltd. (2019).
5.The Ld. CITIA) shifted the burden of proof from the assessee to the Department contrary to the settled principle that the assessee must conclusively establish the source of credits. The CIT(A) thus erred in granting relief without a proper enquiry into the real source and capacity of the lenders.
6.The Ld. CITIA) shifted the burden of proof from the assessee to the Department contrary to the settled principle that the assessee must conclusively establish the source of credits. The CIT(A) thus erred in granting relief without a proper enquiry into the real source and capacity of the lenders.
7.The present case involves organized tax evasion and accommodation entries, falling squarely within Exception (h) of Para 3.1 of CBDT Circular No. 5/2024. The Ld. CIT(A) failed to appreciate the gravity of the case, requiring strict scrutiny rather than unwarranted relief.
8.Moreover, the department has filed the appeal before Hon'ble Delhi High Court, against the Hon'ble ITAT Order in the case of the assessee for AY 2021-22 on the similar issue.
9.That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law.
10.The grounds of appeal are without prejudice to each other.
11.That the appellant craves to add, amend, after or modify any grounds of appeal at the time of hearing.”
Though ld. DR has submitted that each year is a different assessment year and the findings if any in favour of assesse from the Tribunal in earlier years were not binding on the assessing officer and assessing officer could have examined the genuineness of transaction, creditworthiness of the lender and identity of lenders.
However, what we find from the submissions of ld. Senior Counsel and the material on record that assessing officer was apprised of the fact that ld. CIT(A) in AY: 2021-22 and the Tribunal in AY: 2017-18 had examined the genuineness of transaction, creditworthiness of the lender and identity of the lender to hold that the same were not bogus. As we go through the impugned assessment orders we find that as with regard the years before us nothing different and further has been established so as to assert that the findings of ld. CIT(A) of the Tribunal in other years would not be binding on the assessing officer. In para 6.14 in the Assessment Year 2018-19 the assessing officer had observed as follows:
6.14.The assessee has not been able to prove the identity, genuineness and creditworthiness of the company M/s Dreamland Buildshoppe Pvt. Ltd. It has just relied upon the order passed by Ld. CIT(A) for AY 2021-22, in which Ld. CIT(A) has deleted the addition on the same issue.
Further, the Hon'ble ITAT has also upheld the decision of the Ld. CIT(A). In this respect, it is noteworthy that the Income Tax Department is in the process of filing an appeal before the Hon'ble High Court of Delhi, against the order of Hon'ble ITAT for AY 2017-18 and also for AY 2021-22, therefore the order of Hon'ble ITAT is not acceptable on the issue of unsecured loans.”
Ld. Senior Counsel has demonstrated before us on the basis of a chart that since 2013-14 onwards till 2021-22 the issue of loan from M/s Dreamland Buildshoppe Pvt. Ltd. has been under examination by the department and in 2013-14 and 2014-15 assessment was completed u/s 143(3) without any additions. In AY: 2015-16 assessment was completed u/s 153A at returned income. In AY: 2016-17 addition was made by assessing officer but deleted by ld. CIT(A) and no appeal was filed by revenue in the Tribunal. In AY: 2017-18 addition made by assessing officer was deleted by ld. CIT(A) and confirmed Tribunal. In AY: 2018-19 and 2019-20, which are the years before us, assessments were completed u/s 153A at the returned income and then re-opened. In AY: 2020-21 addition was deleted by ld. CIT(A) and no appeal was filed by the revenue in the Tribunal. In AY: 2021-22 addition was made by assessing officer and deleted by ld. CIT(A).
As we take into consideration the Coordinate Bench decision for AY: 2017-18 vide ITA No. 1703/Del/2022, we find that additions made u/s 68 of the Act credit balance from earlier years were held to be rightly deleted by ld. CIT(A) and in AY: 2021-22 vide ITA No. 948/Del/2024 order dated 26.11.2024 also the department’s appeal was dismissed with relevant findings that even source of source of funds of lender company is proved.
As for convenience we reproduce para 9-12 of the order of Coordinate Bench in AY; 2021-22 (supra): -
“9.Admittedly, the assessee is having running account with the lender company. The ledger account of the lender for the period 1.4.2015 to 31.3.2021 is part of the record. No adverse inferences were drawn with regard to unsecured loans received from the very same lender company in the scrutiny assessments completed u/s 153A or 143(3) of the Act except in Asst. Year 2017-18, where an addition was made u/s 68 of the Act which stood deleted by ld. CIT(A). On further appeal by the revenue to this Tribunal for Asst Year 2017-18, the same was dismissed by the Tribunal in ITA No. 1703/Del/2022 dated 4.1.2024 on merits of the addition u/s 68 of the Act. From the documents placed on record by the assessee before the lower authorities and also before us, it is evident that the assessee company in the instant case had duly proved the source of source of lender company by stating that the funds had been received by the lender company from the group companies of assessee (i.e Uppal Projects Pvt. Ltd and Uppal Hotels Pvt Ltd) . These details are given in tabular form in Page 34 of the order of ld CIT(A) which is part of reproduction supra. Hence the creditworthiness of the lender company cannot be doubted.
10.The monies have been received in regular banking channels and duly reflected in the balance sheet of the lender company. The lender company had also furnished confirmation before the ld AO directly in response to notice u/s 133(6) of the Act along with other requisite details that were called for by the ld AO. Even the statement of Director of lender company i.e Shri Sunil Srivastava appeared before the ld AO on 26.9.2022 and a statement on oath was recorded from him wherein he had duly confirmed all the loan transactions with the assessee company. Hence the genuineness of transactions could not be doubted at all.
11.The notice issued u/s 133(6) of the Act behind the back of the assessee stood directly served on the lender company and the same was also duly responded by the lender company directly before the ld AO by furnishing the requisite details. Hence the identity of the lender company cannot be doubted at all.
12.Further the assessee was also subjected to search u/s 132 of the Act and nothing incriminating was found during the course of search to support the allegations of the ld AO. Hence nothing was found to substantiate the allegations of the ld AO to allege that the unsecured loan received by the assessee was in the nature of accommodation entry from the lender company. It is not in dispute that the assessee company is having running account with the lender company which is evident from the ledger account for the period 1.4.2015 to 31.3.2021 containing loans received in various years (which stood accepted by the revenue u/s 143(3) of the Act except AY 2017-18 as detailed supra) and loans being repaid in various years by the assessee company. Source of source of funds of the lender company is also proved by the assessee in the instant case. Hence there is absolutely no case for the revenue to justify an addition u/s 68 of the Act in the facts and circumstances of the instant case. Hence we do not find any infirmity in the order of the ld CIT(A). Accordingly, the grounds raised by the revenue are dismissed.”
In the light of aforesaid we are of considered view that grounds raised by the department have not substance. The appeals are accordingly dismissed.