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Judgment
PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of the Commissioner of Income Tax, Appeals Addl/JCIT(A)-9 Mumbai [hereinafter referred to as “Ld. CIT(A))”] vide order dated 11-12-2025 pertaining to A.Y. 2012-13 arising out the assessment order dated 29-12-2019 passed under section 147 of the Income -tax Act 1961, (in short “the Act”).
The brief facts of the case are that R.N. Creation Ltd. is a private limited company incorporated on 29 December, 2006 at Registrar of Company Delhi. The assessee not filed the return of income for A.Y.2012-13 under section 139 of the Act. A search and seizure operation under section 132 of the Act carried out in the case of Macons Meenu and Yadav Singh Group, Noida its business premises and residences of the Director their family members and other key persons on 21-11-2014. For the purpose of assessment a notice under section 153C of the Act was issued. In the response of the notice the assessee filed it return of income declaring Nil. During the year under consideration the assessee accepted unsecured loans from the three lenders for the Amount of Rs.6,50,000/-. The genuineness of the lenders, from whom unsecured loan was accepted were raised. In the response to the same the AR of the assessee submitted the details of the lenders. Since the assessee had not disclosed the fully and truly materials, therefore, reassessment proceedings under section 147 of the Act were initiated and notice under section 148 0f the Act was issued on 27-03-2019. Again, notice under section 142(2) of the Act along with questionnaire were issued. In the response of the notice the assessee filed the details of the loans and the bank account of the lenders. Not convinced with the submissions made by the assessee, Assessing Officer disallowed the unsecured loans taken from the Ess Kay Electricls, Light & Power System Bhanu Prasad and Sandeep Kumar. Accordingly, he made the additions of Rs 6,50,0000/- under section 68 of the Act.
Aggrieved the order of the ld. Assessing Officer the assessee preferred the appeal before the Ld. CIT(A) and raised several grounds of appeal. It was submitted the assessee has filed confirmation ITR copies, Bank account details, ledger account copies of the lenders to establish three vital ingredients of cash credits i.e. identity, creditworthiness and genuineness of the transaction. After considering the detailed submissions, Ld. CIT(A) observed that assessing has proved the creditworthiness and genuineness of the lender, Light and power system and lender has the balance of Rs.9,65,501/- and deleted the addition of Rs. 1,00,000/- and rest additions was confirmed.
Aggrieved with the above order, the assessee is in appeal before us raising following grounds of appeal:-
1.The learned CIT(A) has erred in assuming jurisdiction in term of section 147 of the Income Tax Act.
1.1The learned CIT(A) in the absence of any additional information gathered / furnished to the assessee, has erred in framing assessment under section 148/143(3) of the Act.
2.That on the facts, circumstances of the case and in law, the learned CIT(A) has grossly erred in making an addition of INR 5,50,000/- as unexplained cash credits of section 68 of the Act.
2.2That on the facts, circumstances of the case and in law, the learned CIT(A) has failed to appreciate the documents furnished for such loan made and guided by some assumptions, premise and prejudice against the appellant and has made an addition of INR 5,50,000/- of cash credits.
3.That on the facts, circumstances of the case and in law, the Learned Assessing Officer has erred in charging interest under Section 234A, 234B of the Act.
4.That having regard to the facts and circumstances of the case and in law, the impugned order violates the principles of natural justice, fair play and equity.
5.That the impugned order passed by Learned CIT(A) is bad in law and void-ab-initio and deserves to be quashed.
6.The Appellant craves leave to add, amend vary omit or substitute any of the aforesaid grounds of appeal at any time before or at the time of hearing of the appeal.
7.All the above grounds are independent and without prejudice and not withstanding each other.
8.Any consequential relief, to which the Appellant may be entitled under the law in pursuance of the aforesaid grounds of appeal or otherwise, thus may be granted.
5 At the time of the hearing, ld. AR of the assessee brought to our notice that page no. 3 of the assessment order wherein the Assessing Officer has found that the assessee had no truly and fully disclosed material facts necessary for his assessment for the year under consideration. In this regard, he brought to our notice page 10-27/50 of the paper book which is the confirmation of accounts submitted by Sandeep Kumar and page no. 10-32/50 of the Ess Kay Electrical which is the confirmation letter submitted by Ess Kay Electrical and submitted that transactions were carried on during the year through banking channel. He further submitted that notice was issued on the wrong address to the Ess Kay Electrical. No notice was issued on the given address in the ITR. He further submitted that the AO has proceeded to make addition on the basis of that the identity, genuineness and creditworthiness of the transaction remains unproved. With regard to genuineness, he submitted that confirmation of accounts submitted by the assessee clearly shows that it is a business transaction carried on for the purpose of business and prayed that the addition made by Assessing Officer may be deleted. The Ld. AR of the assessee also submitted that reason to belief has not been provided to the assessee. In the assessment order nowhere, stated that the copy of reason to believe was provided to the assessee. He further submitted that proper opportunity of clarification was not provided by the Ld. CIT(A).
On the other hand, Ld. DR of the Revenue relied on the findings of the lower authorities.
We have heard the parties and gone through the material available on record. We find that the Ld. CIT(A) has passed the order after giving the opportunity of being heard to the assessee. The Ld. CIT(A) has rightly held that the Assessing Officer had bonafide material for forming a prima facie belief that income chargeable to tax has escaped assessment. The reopening by the Assessing Officer was valid. We do not find any reason to interfere with the findings of the Ld. CIT(A), on the ground no.1 therefore, ground No. 1 is decided against the assessee.
Ground No.2
We observed that during the assessment proceedings, Assessing Officer has asked information from the assessee relating to unsecured loan received from Ess kay Electrical, Sandeep Kumar and Light & power system Bhanu Prasad and the assessee filed the letter along with computation of Income, ITR, and bank statement all the three entities. In our considered view, the detailed evidences filed by the assessee before the lower authorities clearly indicates that assessee has submitted confirmation letters form all three parties which are on record. It clearly indicates that M/s Ess kay Electrical lending the amount to the assessee through banking channel and had the sufficient funds before landing the amount to the assessee. The Sandeep Kumar also lending the amount to the assessee through banking channel and confirmation letters were filed by the assessee before the authorities. The assessee has proved the genuineness and creditworthiness of the lenders. The nature and source of credit was satisfactory explained by the assessee. The justification provided by the assessee is acceptable as it is supported by evidences. The assessee has discharged his onus and proved the genuineness and creditworthiness of the lenders, therefore the addition made by the Assessing Officer is liable to be deleted and thus deleted accordingly, ground raised by the assessee is allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court 24.06.2026.