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Judgment
Per Renu Jauhri, Accountant Member:
This appeal by the assessee is directed against the order dated 03.12.2025 of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the Assessment Order dated 06.03.2024 passed under section 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the Assessment Unit, Income Tax Department (hereinafter referred to as the ‘AO’) pertaining to Assessment Year (A.Y.) 2019-20.
The assessee has raised the following grounds of appeal:-
“1.The Ld. AO has erred in law and on facts in making the addition of Rs 43,80,750/-u/s 69 for purchase of property which is duly recorded in the books of account and reflected in the audited balance sheet filed with IT department.
2.The Ld AO erred in law and on facts of the case for rejecting the explanation and documents offered by the appellant with respect to the nature and source of unsecured loan received from parties:
a)Prem Goel (AKXPG9730E) 30 Lacs
b)Padamshree Industries (AALFP4332P) 27 Lacs without any basis and had acted merely on surmises, conjuncture, suspicious, presumption and assumption, which is not permitted under the law.
3.The Ld AO has erred in making an addition u/s 69 without considering the facts that the loan received for purchase of property had also been repaid major part during the same financial year through banking channels and the complete loan were returned in FY 2019-20.
4.The Ld AO erred in law for reopening of assessment u/s 148 for purchase of property purchased on 31.08.2018 when this information for purchase of property was already available with the Ld AO at the time of filing of Form 26QB and deduction of the TDS on purchase of property much before the time for issue of notice prescribed u/s 143(2) for the verification of source, instead of taking the route of section 148 after 3 years for making fishing enquiries, which is not permitted under the law.
5.That the Appellant craves, leave to add/alter any/all grounds of appeal before or at the time of hearing of the Appeal. 6. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence.”
Brief facts are that the assessee filed his return for A.Y. 2019-20 on 30.10.2019 declaring total income of Rs. 10,7,810/-. The case was reopended u/s 148 on 28.03.2023 as the assessee was found to have purchased immovable property worth Rs. 87,61,500/- during the year under consideration. During the course of proceedings, it was noted that the assessee had taken unsecured loan from M/s Padamshree Industries and Sh. Prem Goyal, which were utilized for purchase of the impugned property jointly with his wife in which 50% share of the assessee was Rs. 43,80,750/-. The AO as well as the CIT(A) treated the unsecured loans as non-genuine and the addition of entire consideration paid by the assessee (Rs. 43,80,750/-) was made as unexplained investment u/s 69 r.w.s. 115BBE of the Act. The assessee is aggrieved and has filed the present appeal before the Tribunal against the order of the CIT(A).
Before us, Ld. AR has submitted that the addition on account of unexplained investment u/s 69 of the Act could not have been made by the AO as the property was disclosed in the return of the assessee and TDS on the transaction was duly reflected in the 26AS statement. He has further submitted that requisite details with regard to the source of purchase consideration being the two loans were duly submitted before the lower authorities. In respect of both the loans, the onus to prove the identity, creditworthiness of the lenders and genuineness of the transactions was duly discharged by the assessee.
Ld. AR has further submitted that the sources of payment made for the purchase of property have been explained as under:
With regard to the unsecured loans, following documents were furnished before the lower authorities:
Confirmation of both the parties
PAN details
Bank statements / ITRs
Moreover, loans have also been repaid through banking channels in the subsequent years. In the light of these details, Ld. AR has argued that the addition made u/s 69 is without any basis and is liable to be deleted.
On the other hand, Ld. DR has strongly relied on the orders of the lower authorities and has pointed out that the onus to establish the creditworthiness of the lenders was not fully discharged as held by the CIT(A) in his order.
We have heard the rival submissions and perused the material available on record. We are of the considered view that once primary onus to establish the identity of the lenders, their PAN/ ITR details and bank statements to establish the creditworthiness and genuineness of transactions had been discharged by the assessee, the AO should have conducted further enquiries in case he was not satisfied, instead of simply rejecting the assessee’s submissions.
After careful consideration of the entire factual matrix, we hereby delete the addition of Rs. 43,80,750/- u/s 68 of the Act.
In the result, appeal of the assessee is allowed.