ANKITA CONSTRUCTIONS LLP,MEERUT V. ITO, WARD - 1(1), MEERUT

ITA 6413/DEL/2025

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Ankita Construction LLP appealed against the order of the National Faceless Appeal Centre (NFAC), which had confirmed the additions made by the assessing officer regarding unsecured loans and interest thereon. The assessing officer had doubted the genuineness of the unsecured loans and the corresponding interest payments, leading to substantial additions to the appellant's income for the assessment year 2022-23. The Tribunal examined the detailed submissions, documents, and financial records provided by the appellant, including confirmations, bank statements, and MCA master data of the lenders. The Tribunal concluded that the loans were taken through proper banking channels, and the financial health of the lenders supported the creditworthiness of the transactions. The Tribunal also noted that the assessing officer had not conducted a thorough investigation into the transactions, relying instead on broad allegations without factual analysis.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848538 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Delhi
• Assessment Year: 2022-2023
• Appeal Filed On: 10-10-2025
• Other Referred Cases: PCIT vs. NRA Iron & Steel Pvt. Ltd., CIT, Kanpur Versus LalMohar, India Rice Mills
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASSESSEE. EVEN; JITENDER SINGH
• Assessee Lawyers: ROHIT AGARWAL
• Keywords: Business income; Tax effect; TDS; Bogus
• Section: 68; 131; 133(6)

Judgement Text

"P a g e | 1 ITA No. 6413/Del/2025 Ankita Construction LLP (AY: 2022-23) IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.6413/Del/2025 (Assessment Year: 2022-23) Ankita Constructions LLP A-312, Meerut Mall, Delhi Road, Meerut, Uttar Pradesh – 250002 Vs. ITO, Ward-1(1) Ayakar Bhawan, Near Bhaisali Ground, Delhi Road, Meerut Uttar Pradesh – 250002 \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No: ABTFA1224E Appellant .. Respondent Appellant by : Sh. Rohit Agarwal, CA Respondent by : Sh. Jitender Singh, CIT (DR) Date of Hearing 19.02.2026 Date of Pronouncement 25.03.2026 O R D E R PER ANUBHAV SHARMA, JM: This appeal is preferred by the assessee against the order dated 29.09.2025 of the Ld. National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. Printed from counselvise.com P a g e | 2 ITA No. 6413/Del/2025 Ankita Construction LLP (AY: 2022-23) ‘Revisionary Authority’) in DIN & Order No : ITBA/NFAC/S/250/2025- 26/1081298057(1)arising out of the order dated 27.03.2024 u/s 143(3)r.w.s 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the Assessment Unit, Income Tax Department, for AY: 2022-23. 2. Heard and perused the records. The appellant is a Limited Liability Partnership firm carrying on real estate business. During the year under consideration no sales have been executed hence no business income was earned. The appellant filed its ITR for the relevant year on 18.07.2022, declaring a loss of Rs. 1,50,261/-.The ITR filed by the appellant was selected for scrutiny assessment through CASS and notice u/s 143(2) of the Act, was issued on 01.06.2023. The assessment proceedings were completed by making additions of Rs. 15,06,91,119/-, to the income of the appellant on the following issues: - • An Addition of Rs.14,24,00,000/- has been made u/s 68 of the Act, holding that the unsecured loans taken by the appellant from 11 companies were not genuine. • A disallowance of Rs.82,91,119/-, has been made holding that the interest paid on the above referred loans was not a genuine expenditure. Printed from counselvise.com P a g e | 3 ITA No. 6413/Del/2025 Ankita Construction LLP (AY: 2022-23) 2.1 The assessing officer had examined the issue from the perspective that during the year unsecured loan have increased to Rs.21,24,92,007/- as against unsecured loans of previous year at Rs.12,25,14,309/-. Assessee had submitted party wise details of unsecured loans, confirmations of lender along with copy of their bank account and there upon assessing officer concluded that these parties had huge amounts of money credited and simultaneously debited and the ITRs showed meagre income. 2.2 Assessing officer also questioned the reasons for taking unsecured loan for which assessee replied that an advance of Rs.20,28,64,193/- has been paid to M/s Ansal Landmark Township Pvt. Ltd. (ALTPL) for purchase of an immovable property and copy of agreement dated 02.12.2020 with the said party was provided. The assessing officer observed that this is an agreement to sale without possession and M/s Anshal Landmark Township Pvt. Ltd. (ALTPL) had initiated a project at city Meerut in Uttar Pradesh. However, due to non-payment of dues to the Meerut Development Authority (MDA) & ICICI venture capital fund (VCF) the said immovable property was seized by this authorities. As per the said agreement, the total cost of such property was shown at Rs.21.50 crores and as per the agreement assessee had already paid Printed from counselvise.com P a g e | 4 ITA No. 6413/Del/2025 Ankita Construction LLP (AY: 2022-23) an amount of Rs.9,68,32,494/- to ALTPL and MDA before such agreement was made. The balance amount of Rs.11,81,67,506/- was to be paid to ICICI, VCF and ALTPL and balance was TDS. The payment made to ICICI, VCF is confirmed. The assessing officer concluded that when assessee was not getting any right in the immovable property under this agreement there was no genuineness of transaction. Further, the assessing officer doubted the transaction of loan that the same were given without any collateral security documentation and correspondences. He concluded that assessee had diverted funds towards ALTPL transaction in which he had no rights even after 4 years of investment. Thus, concluded that assessee had introduced in its any unaccounted funds in the guise of unsecured loan and accordingly made addition. 3. Aggrieved by the above, the appellant filed an appeal before the Ld. CIT(A). During the course of the appeal proceedings the appellant filed its detailed submissions in support of the grounds of appeal raised. The appeal of the appellant was dismissed by the NFAC, vide impugned order dated 29.09.2025 for which assessee is in this appeal before this Tribunal and raised following grounds. Printed from counselvise.com P a g e | 5 ITA No. 6413/Del/2025 Ankita Construction LLP (AY: 2022-23) “1. That the Ld. CIT(A) has erred in law and the facts of the case by confirming the additions of Rs.14,24,00,000/- made u/s 68 of the Act, holding that the unsecured loans taken by the appellant from 11 unsecured lenders were not genuine and the order under appeal as passed by the Ld. CIT(A), deserves to be set-aside being illegal and inconsistent with the facts of the case. (Tax effect - Rs.13,77,29,270/-) 2. That the Id. CIT(A) has erred in law and facts of the case by confirming the disallowance of Rs.82,91,119/-, being the amount of interest paid on unsecured loans, ignoring the fact that the same was not claimed by the appellant in its profit & loss account for the year under consideration, hence no disallowance of the same could have been made, therefore the order under appeal as passed by the Ld. CIT(A), deserves to be set-aside being illegal and inconsistent with the facts of the case. (Tax effect - Rs.35,27,479/-) . 3. That the appellant craves leave to add, modify and/or delete any ground of appeal on or before the date of hearing in order to enable your honor to dispose of the appeal as per law.” 4. We have given thoughtful consideration to the submissions and gone through the records. Ground No.1; has been raised challenging the action of the Ld. CIT(A) of confirming the impugned addition of Rs. 14,24,00,000/- u/s 68 of the Act, holding that the unsecured loans taken by the appellant from 11 companies were not genuine. In this context we find that assesse had filed detailed submission before the Ld. CIT(A) copy of which is placed at Page Nos. 229 to 240 of the paper book. The appellant had filed copies of confirmations, ITR, bank statements of all the 11 unsecured lenders under consideration. Copies of the same are placed at page nos. 19 to 113 of the paper book. Assessee has further provided to the ld. Tax authorities, copies of Printed from counselvise.com P a g e | 6 ITA No. 6413/Del/2025 Ankita Construction LLP (AY: 2022-23) MCA master data of all the 11 unsecured lenders, showing the current status as active and compliant has been placed at page nos. 114 to 128 of the paper book. Copies of 26AS of the lenders are placed at page nos. 152 to 162 of the paper book, in support of the fact that the TDS made by the appellant was duly appearing in their 26AS.One of the unsecured lender namely, M/s Monterry Sales Pvt. Ltd., is a registered NBFC, copy of its NBC registration certificate is placed at page no. 241 of the paper book. 5. These genuineness of these documents have not been disputed nor on the basis of any discrepancy it is alleged by the department that they are sham documents prepared with any intention to create evidences to support the impugned transactions. These documents establish that all the loans have been taken through proper banking channels, interest has been credited on all the loans and TDS has been made and deposited on the interest paid to all the lenders. 6. The most material evidences are the copies of the audited balance sheets and profit & loss a/c's of all the unsecured lenders which are placed at page nos. 129 to 151 of the paper book to support creditworthiness of all the Printed from counselvise.com P a g e | 7 ITA No. 6413/Del/2025 Ankita Construction LLP (AY: 2022-23) lenders. The summary of loans given, lender's returned income and their Net worth is as under: - Sr. No. Name Loans Given Returned income Net Worth as on 31.03.2022 1. Bhagwat Traders Pvt. ltd. 2,12,50,000/- 4,19,590/- 31,41,85,382/- 2. Capable suppliers Pvt. Ltd. 1,00,00,000/- 20,900/- 33,99,38,082/- 3. Fabert Agencies Pvt. Ltd. 1,06,25,000/- 44,37,970/- 31,08,81,575/- 4. Gabarial Suppliers Pvt. ltd. 1,11,00,000/- 4,34,410/- 32,52,35,991/0 5. Glix Commercial Pvt. Ltd. 1,27,75,000/- 71,88,000/- 47,89,01,840/- 6. Growth Tradecom Pvt. ltd. 1,90,00,000/- 29,88,450/- 8,74,87,608/- 7. Kanha Enterprises Pvt. Ltd. 33,00,000/- 6,22,490/- 16,34,87,807/- 8. MarubhumiVyapar Pvt. Ltd. 2,48,50,000/- 70,260/- 39,48,91,976/- 9 Monterry Sales Pvt. Ltd. 2,59,75,000/- 14,95,210/- 49,99,63,634/- 10 Shri Radhey Intermediaries Pvt. ltd. 17,00,000/- 22,47,810/- 27,32,28,247/- 11 Skael Enterprises Ltd. 18,25,000/- 95,27,210/- 66,94,29,000/- 7. The Id. AO has not made any enquiry whatsoever before reaching the conclusion that the loans taken by the appellant were bogus. No notices u/s 133(6) or 131 of the Act were ever issued to any of the lenders. AO has given the findings that there was circular trading in the bank statements of the lenders without examining financials and specially the full bank statements of the lenders. As this aspect was raised by assesse before ld. CIT(A), the contention was very arbitrarily rejected by observing on page 8, “ AO is not obligated to follow any particular method of enquiry’. Hon'ble Supreme Court in the case of PCIT vs. NRA Iron & Steel Pvt. Ltd. (2019) 412 ITR 0161, in para 11 has laid down three principles to examine credit entries and principle (ii) holds that A.O. is duty bound to make investigation the Printed from counselvise.com P a g e | 8 ITA No. 6413/Del/2025 Ankita Construction LLP (AY: 2022-23) creditworthiness, verify identity and ascertain transaction is genuine or not. Asking responses from the investors by issue of notices u/s 133(6) of the Act or examining their financials or local enquires are some of the mode of conducting such investigation. However, both the authorities below have on bald allegations have doubted the transaction and without any factual analysis on broad principles of law laid in various judicial decisions have doubted the transaction. The net worth of parties is good enough a lead to hold that these parties were not some paper companies with no credibility of their own. The lack of income during the year is not conclusive parameter to hold any entity to be meagre pass accommodation entry provider for assessee. Even otherwise the material on record in the form of financials of these lenders made available at pages 129-151 of the PB shows that in case of M/s Fabert Agencies Pvt. Ltd. the said lender has revenue from operations of Rs. 82,07,539 (PB 134) and ‘other income’ of Rs. 1,37,71,594 during the years. Glix Commercial Pvt. Ltd. has revenue from operations of Rs. 5,38,61,966 (PB 138). Similarly Growth Tradecom Pvt. Ltd has revenue from operation of Rs. 1,11,76,000 and other income of Rs. 89,94,520 (PB 140). Kanha Enterprises Pvt. Ltd. has revenue from operations of Rs. 1,49,89,229 (PB 142). Monterry Sales Pvt. Ltd. has revenue from operation of Rs. 2,58,91,417 Printed from counselvise.com P a g e | 9 ITA No. 6413/Del/2025 Ankita Construction LLP (AY: 2022-23) (PB 146) and Shri Radhey Intermediaries Pvt. Ltd. has revenue from operations of Rs. 4,95,96,087 and ‘other income’ of Rs. 1,44,60,376 (PB 148) Thus factually there is incorrect assertion of AO that lenders have no business but used to infuse the money of assessee only. 8. Then, in the present case assessee has taken a plea that it has entered into a registered agreement to purchase a property investing this borrowed amount from M/s Ansel Landmark Township Pvt. Ltd and admittedly the copy of said agreement was provided to the Ld. Tax Authority's below. The case of assessee is that in spite of paying the consideration the property was not transferred in the name of assessee due to the order of Hon’ble Delhi High Court and an ongoing civil dispute. The ld. Tax authorities below have not doubted the payments made to prospective vendor or the pending dispute but discredited this claim of the assessee on the assertion that in spite of paying full consideration assessee has acquired no rights in the property and this raises serious doubts about the commercial rationale for taking such a large unsecured loan when the ultimate investment provides no security or rights to the applicant. We are of the considered view that while examining Printed from counselvise.com P a g e | 10 ITA No. 6413/Del/2025 Ankita Construction LLP (AY: 2022-23) the genuineness of a transaction, the use of the loan amount cannot be of consequence so as to doubt the loan transaction and thereupon it’s source too. 9. Therefore we are of the considered view that learned tax authorities have fallen in error to conclude that the unsecured loans represent the appellant's own unaccounted money introduced in the form of loans. Rather it being the first year of operation of the SSE, as SSE has been incorporated on 24th October 2020 and there is no revenue till the closure of the financial year, attributing a client's own unaccounted money is not sustainable in law. Reliance in this regard is rightly placed by the Ld. counsel on the decision of the Hon’ble Allahabad High Court in the case of CIT, Kanpur Versus LalMohar [2017] 88 taxmann.com 260, where too addition was made under Section 68 of the Act and the assessee in that case was also an association of persons which had commenced its business in the relevant previous years. Hon'ble High Court, relying on its earlier decision in the case of India Rice Mills [1996] 218 ITR 508, held that an addition under Section 68 of the Act cannot be made in the hands of the firm or any artificial person in the first year of business. Printed from counselvise.com P a g e | 11 ITA No. 6413/Del/2025 Ankita Construction LLP (AY: 2022-23) 10. We thus sustain ground no. 1 and ground no 2 being only consequential to ground no.1 also stands sustained. The appeal is allowed and impugned additions stands deleted. Order pronounced in the open court on 25.03.2026 Sd/- (Manish Agarwal) Sd/- (Anubhav Sharma) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated 25.03.2026 Rohit, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Printed from counselvise.com "