Vaibhav Jindal vs Income Tax Office, Ward-51(5)

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of the Additional/Joint Commissioner of Income Tax (Appeals)-1, Visakhapatnam [in short 'the CIT(A)'] dated 20.01.2026, for Assessment Year 2012-13.

Shri Rohit Singhal, appearing on behalf of the assessee, submits that the solitary issue assailed in the present appeal is the addition of Rs.18,00,000/- made u/s.68 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). Narrating facts of the case, the Id. AR submits that the assessee is a trader in gold and diamond jewellery. The assessee had taken an unsecured loan of Rs.18,00,000/- on 10.03.2012 from M/s. Devarya Infotech Pvt. Ltd. It is further submitted that out of the aforesaid loan, a sum of Rs.15.50 lakhs was repaid by the assessee in the month of March 2012 itself and the remaining amount of Rs.2.50 lakhs was repaid in subsequent financial years, i.e., Rs.2,00,000/- on 21.05.2012 and Rs.50,000/- on 06.09.2013. The entire loan transaction, including repayment, was carried out through banking channels and no interest was paid on the said unsecured loan. The ld. AR further submits that during the course of assessment proceedings, notice under section 133(6) of the Act was issued by the Assessing Officer to M/s. Devarya Infotech Pvt. Ltd. In response thereto, the lender duly furnished confirmation of the loan transaction. It is contended that the Assessing Officer (AO) made the addition on the ground that since the lender company had declared total income of Rs.44,271/- in its return of income, the creditworthiness of lender is not proved. It is further submitted that the CIT(A), while dismissing appeal of the assessee,has merely reiterated findings of the Assessing Officer without conducting any independent enquiry or bringing any adverse material on record.

Per contra, Shri Manoj Kumar, representing the Department vehemently defended the impugned order and prayed for dismissal of the appeal of assessee. The ld. DR submits that the assessee has failed to substantiate creditworthiness of the lender as well as the genuineness of the transaction.

The short issue arising for consideration in the present appeal is the addition of Rs.18,00,000/- made u/s.68 of the Act. The assessee had taken an unsecured loan of Rs.18,00,000/- from M/s. Devarya Infotech Pvt. Ltd. on 10.03.2012. The assessee has placed on record its bank statement (pages 75 to 77 of the paper book), which reflects receipt of the aforesaid loan and repayment of Rs.15.50 lakhs in the month of March 2012 itself in three transactions of Rs.5,00,000/-, Rs.6,00,000/- and Rs.4,50,000/-. To substantiate the creditworthiness of the lender, the assessee has also placed on record bank statement of M/s. Devarya Infotech Pvt. Ltd. (at page 79 of the paper book). A perusal of the same shows that sufficient funds were available with the lender at the time of advancing of interest-free short-term unsecured loan to the assessee. It is an undisputed fact that in response to notice issued u/s.133(6) of the Act, the lender has furnished confirmation of the loan transaction. In view of the documentary evidences placed on record, I find merit in submissions of the assessee. The addition of Rs.18,00,000/- made u/s. 68 of the Act is, accordingly, directed to be deleted.

In the result, appeal of the assessee is allowed.