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Judgment
O R D E R
PER MANISH AGARWAL, AM:
This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-3, Noida [CIT(A), in short] dated 16.01.2026 in Appeal No. CIT(Appeals), Kanpur-4/11160/2019-20 arising out of order passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) dated 30.09.2022 for Assessment Year 2020-21.
Brief facts of the case are that the assessee is a Private Limited Company engaged in the Real Estate business and filed its return of income on 10.02.2021 declaring loss of Rs. 35,55,78,301/-. The case of the assessee was selected for scrutiny and the AO observed that during the year under appeal assessee has received loans of Rs.12,42,25,000/- from three companies and since the assessee has failed to prove the genuineness and creditworthiness of the parties, addition was made u/s 68 r.w.s 115BBE of the Act for the loan received during the year of Rs.12,42,25,000/-.
Against the said order, assessee filed appeal before the Ld. CIT(A) who vide order dated 16.01.2026 has deleted the additions of Rs.9,62,25,000/- of the loan received from M/s Hallow Securities Pvt. Ltd. and Rs.1.30,00,000/- from M/s NU-Ruchi Barter Pvt. Ltd. and confirmed the loan received from M/s Sundaram Consultants Pvt. Ltd. Rs.1,50,00,000/-.
Against the said order, the assessee is in appeal before the Tribunal by taking the following grounds of appeal:
“1.That the Ld. CIT(A) has erred both in law and on facts in sustaining the addition of 1,50,00,000/-under section 68, and applying section 1158BE, on account of unsecured loans raised from Sundaram Consultants Pvt. Ltd., without appreciating the documentary evidence on record fully establishing the creditworthiness of the lender companies.
2.That the Ld. CIT(A) has erred in law and on facts in sustaining the addition of 1,50,00,000/- under section 68 and in applying section 115BBE, despite the fact that the repayment of 1,00,00,000/-along with interest incurred on unsecured loan of 4,67,923/- during the year was not disputed, rendering the addition arbitrary and unsustainable in law.
3.That the Ld. CIT(A) has erred in upholding the addition of 1,50,00,000/- under section 68 on account of unsecured loan raised from Sundaram Consultants Pvt Ltd., ignoring that the lender's creditworthiness, especially when the assessee had furnished the lender's bank statements and audited financials.
4.That the Ld. CIT(A) has erred in law in sustaining an assessment order which is not digitally signed, in violation of CBDT Instruction No. 1/2018, mandating digital signature for orders passed through e-Proceedings, rendering the impugned assessment order invalid and unenforceable in law.
5.That the appellant craves leave to add, alter, amend, modify, or withdraw any of the foregoing grounds of appeal at the time of hearing or thereafter, as may be deemed necessary in the interest of justice.”
All the grounds of appeal taken by the assessee are with respect to the additions of Rs.1,50,00,000/- confirmed by Ld. CIT(A), therefore, they are taken together for consideration.
Before us, Ld. AR for the assessee submits that assessee has discharged his onus casted upon its u/s 68 of the Act of proving identity and credit worthiness of the lender and genuineness of transaction by filing confirmations, banks statements PAN Card and ITR of the lender company. The Ld. AR further submits that lender company is a registered NBFC having license from RBI and providing long term – short term finances. The Ld. AR further submits that the assesse has filed complete copy of the bank statements of the lender wherein sufficient funds were available and when the amounts were transferred to the assessee. The Ld. AR further submits that in the case of sister concern of the assessee M/s Bright Builtech Pvt. Ltd., wherein unsecured loans aggregating to Rs.32.00 Crs. received from the same lender company was accepted by the AO as genuine and the copy of the said order is placed at the PB filed before us. Ld. AR further submits that in the case of M/s Jajoo Rashmi Refractories Pvt. Ltd. vs. ACIT, Circle- 04, Jaipur (2020) (2) TMI 424, the Co-ordinate Bench of ITAT, Jaipur has held that M/s Sundram Consultants Pvt. Ltd. as a genuine and creditworthy company. Copy of the said order is placed before us. The Ld. AR thus submits that the addition made and upheld by the Ld. CIT(A) deserves to be deleted.
On the other hand, Ld. CIT-DR supported the orders of lower authorities and submit that Ld. CIT(A) at page 35 of the order has observed that in the case of group company M/s ACE Infractity Developers Pvt. Ltd. for AY 2019-20, the fact of genuineness and creditworthiness of the lender company was examined and after examination of the same, the Ld. CIT(A) has confirmed the addition, therefore, he requested for the confirmation of the addition so made in the hands of the assessee company.
Heard both the parties and perused the materials available on record. It is observed that while confirming the addition, it is observed at page 35 of the order of Ld. CIT(A), that in the case of group concern of assessee namely, M/s ACE Infractity Developers Pvt. Ltd. for AY 2019-20 addition made on account of loan taken from M/s Sundram Consultants Pvt. Ltd. was confirmed. As per ld. AR, it is sole basis for confirming the addition in the hands of the assessee in present appeal. It is observed that the appeal in the case of M/s ACE Infractity Developers Pvt. Ltd has been decided by the Co-ordinate Bench in Appeal No.8184/Del/2025 wherein the Co-ordinate Bench vide its order dated 17.04.2026 has deleted the addition of loan taken from M/s Sundram Consultants Pvt. Ltd. by making the following observations in para 4.1 to 4.5 which is reproduced herein below:
4.1On considering the rival contentions, we find that the AO has alleged Sundram Consultants Pvt. Ltd. to be a shell company with dummy directors. The AO considered the e-mail address of the company to be connected with one of the entry provider companies. The AO has alleged that there was no commercial expediency and also that the complete bank statement was not furnished.
4.2In regard to this entity, our attention was drawn to the fact that in the return of M/s Sundram Consultants Pvt. Ltd., the official e-mail address as per the return filed was different than the one observed by the AO. Then, admittedly, the lender is an NBFC and advancing loan was part of its regular business activity and there is nothing on record or in the submissions of the Department that any of the regulatory bodies had found any deficiency in the conduct of the business.
4.3The Ld. Counsel has drawn our attention to evidences in the paper book showing the share capital and reserve surplus of the company being over Rs.17 crores and revenue during the year was Rs.24 crores.
4.4The attention of the Bench was also drawn to the fact that a coordinate Bench in the case of M/s Jajoo Rashmi Refractories Pvt. Ltd. vs. ACIT, Circle04, Jaipur (2020) (2) TMI 424, order dated 07.02.2020, has given a finding that M/s Sundram Consultants Pvt. Ltd. is a genuine and creditworthy company. In this context, it was also pointed out before us by the Ld. Counsel that the very same entity M/s Sundram Consultants Pvt. Ltd. has been accepted as a genuine lender in the case of appellant’s sister concern M/s Bright Buildtech Pvt. Ltd. wherein unsecured loan aggregating to Rs.32 crores were advanced during AY 2019-20 and no addition of the same was made.
4.5On the basis of the aforesaid facts and circumstances we are of the considered view that the Ld. tax authorities have adopted an unjustified approach to doubt the genuineness of the transaction. The identity of the lender being its creditworthiness on the basis of its financials and genuineness of the transaction of a loan being taken from an NBFC were sufficiently established. We are of the considered view that reasons given by the Ld. CIT(A) for the additions in the hands of assessee, on the basis of assessment for AY 2013-14 in the hands of M/s Sundram Consultants Pvt. Ltd. far stretches the applicability of the provisions of Section 68 of the Act in the case of the assessee. When no material evidence whatsoever was found during the search conducted on two occasions merely on surmises and conjectures of questioning commercial expediency or finding some objectionable manner of running the company alleging dummy directors cannot be sufficient to sustain the addition. Thus, with regard to the loans received from M/s Sundram Consultants Pvt. Ltd., or interests, paid we consider the same deserves to be deleted.
As observed above, in the instant case, while confirming the addition, Ld. CIT(A) has relied upon the judgment of his predecessor in the case of M/s ACE Infractity Developers Pvt. Ltd for AY 2019-20 and hold the loan taken from M/s Sundram Consultants Pvt. Ltd. is ingenuine which order has been reversed by the Co-ordinate Bench by the Tribunal, as reproduced herein above. Therefore, facts being identical, by respectfully following the observations made in the case of ACE Infracity Developers Pvt. Ltd. (supra), the addition made in the hands of the assessee of Rs. 1,50,00,000/- made towards the loan taken from M/s Sundram Consultants Pvt. Ltd., is hereby deleted. All the grounds raised by the assessee are allowed.
In the final result, the appeal of the assessee is allowed.
Order pronounced in the open Court on 06.05.2026.