ASSISTANT COMMISSIONER OF INCOME TAX, DELHI V. TECHNO FAC CONTRACTS PRIVATE LIMITED, DELHI

ITA 1735/DEL/2025

AI Insights

The case involves the Income Tax Department (Revenue) appealing against the order of the CIT(A), which had allowed the appeal of Techno FAC Contracts Private Ltd., a company that had received unsecured loans. The primary issue was whether the CIT(A) erred in deleting the addition made by the Assessing Officer (AO) under section 68 of the Income Tax Act, which pertains to unexplained cash credits. The AO had added the amount to the assessee's income, claiming that the assessee failed to prove the creditworthiness of the lenders during the assessment proceedings. However, the CIT(A) found that the assessee had provided sufficient evidence to substantiate the loans, including the identity and creditworthiness of the lenders and the genuineness of the transactions. The Tribunal, after reviewing the submissions and evidence, concurred with the CIT(A) and dismissed the revenue's appeal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839834 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Appeal Filed On: 21-03-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MAHESH KUMAR
• Assessee Lawyers: GAURAV JAIN
• Keywords: Unexplained cash credit; Income from undisclosed sources; TDS; Accommodation entries
• Section: 143(3); 153A; 68

Judgement Text

"1735_DEL_2025_ACIT VS TECHNO FAC CONTRACTS PRIVATE LTD 1 | P a g e IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SHRI YOGESH KUMAR US, HON’BLE JUDICIAL MEMBER & MRS. RENU JAUHRI, HON’BLE ACCOUNTANT MEMBER ITA No. 1735/DEL/2025; A.Y.: 2017-18 ACIT Vs Techno FAC Contracts Private Ltd. C-1/5 53 Mangla Apartments IP Extension Delhi 110092 (APPELLANT) (RESPONDENT) PAN No. AAACT4539J Assessee by : Shri Gaurav Jain, Advocate Shri Tarun Chanana, Advocate Revenue by : Shri Mahesh Kumar, CIT, DR Date of Hearing: 09.02.2026 Date of Pronouncement: 25.02.2026 ORDER PER RENU JAUHRI : The above captioned appeal is preferred by the revenue before the Tribunal against the order dated 05.02.2025, passed by Ld. CIT(A), National Faceless Appeal Centre (for short, NFAC), Delhi u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as, “Act”), in Appeal No. CITA, Delhi-19/10923/2019-20 for A.Y. 2017-18. 2. The Revenue has raised following revised grounds of appeal: “1. Whether on the facts of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.10,57,30,847/- for A.Y. 2017- Printed from counselvise.com 1735_DEL_2025_ACIT VS TECHNO FAC CONTRACTS PRIVATE LTD 2 | P a g e 18 on account of unsecured borrowings u/s 68 of the IT Act made by AO though the assessee could not prove the creditworthiness of transactions during the course of assessment proceedings. 2. The appellant craves to be allowed to add, alter, amend, append or delete any of the fresh ground(s) of appeal.” 3. Brief facts are that the assessee company filed its original return for A.Y.2017-18 on 06.11.2017, declaring income of Rs. 99,75,480/-, The case was selected for scrutiny during the course of which the assessee was required to submit requisite evidences to prove the identity and creditworthiness of the lenders as well as genuineness of the transactions as under: Ld. AO held that the above mentioned unsecured loans were unexplained as the assessee had failed to discharge its onus u/s 68 of the Act. Accordingly, assessment was completed vide order u/s 143(3) dated 30.12.2019 at an income of Rs. 11,57,06,325/- after making addition on account of unsecured loans u/s 68 amounting to Rs. 10,57,30,847/-. Name Return Income A.Y. 2017-18 Amount of Loan Isha Landbase Pvt. Ltd. 952373 18547903 Prestige Oild Pvt. Ltd. -39866 38691520 Proful Oils Pvt. Ltd. 240540 46546027 Printed from counselvise.com 1735_DEL_2025_ACIT VS TECHNO FAC CONTRACTS PRIVATE LTD 3 | P a g e 3.1 Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). Vide order dated 05.02.2025, Ld. CIT(A) after detailed examination of the facts and circumstances, allowed the assessee’s appeal with the following observations: “9.6 On considering the overall facts of the case and the judicial pronouncement relied upon by the appellant, I find that the appellant filed confirmation as well ITR of the lender Thus, the identity of the lender company has been proved. From bank statements of the lender company, it is evident that no cash has been deposited in the bank account of the lender for giving these loans/ advance to appellant firm. Sources in bank account of lender are through banking channel. I also find merit in the contention of the appellant that the proviso to section 68 of the Act was applicable to the instant AY in respect of share application money and share capital only and it was not applicable for loans and borrowing. Even otherwise, during appellate proceeding the appellant has furnished details in respect of source funds received by the lenders. Further, the assessment orders in the case of these lenders for the instant AY also shows that there is no adverse view about sources of their fund. It is seen that the AO has not pointed out any discrepancy in the details furnished by the appellant. If the AO had any doubt, then he ought to have enquired further in the banking channel to verify the genuineness of sources of these lenders. In the absence of any such enquiry and in the absence of any evidence on record linking the sources of the lender with appellant, it cannot be concluded that the amounts received by the appellant was unaccounted income of the appellant received in the form of accommodation entries. The adverse inference drawn by the AO about the unsecured loan is not supported with any cogent evidence. Various reasons mentioned by the AO are, in my opinion, not sufficient to hold the loan/ advance received by the appellant as accommodation entries, particularly when the lender has not deposited cash in bank accounts for granting the loans to appellant firm. The AO has not pointed out as to whether he had any information or evidence revealed during any enquiry indicating unaccounted nature of loan transaction from the said lenders. Therefore, I agree with the contention of the appellant that by filing above documentary evidences the initial onus on the appellant u/s 68 was discharged. Burden then shifts on the AO to prove that the amount received by the appellant was not genuine but was accommodation entries or that the lender had no capacity to advance such amounts to the appellant. Considering the Printed from counselvise.com 1735_DEL_2025_ACIT VS TECHNO FAC CONTRACTS PRIVATE LTD 4 | P a g e totality of the facts, I am of the view that appellant has discharged the onus u/s 68 of the Act by proving the identity and creditworthiness of the lender and genuineness of the transactions of the loan / advance received from the aforesaid lender companies. In the absence of any specific and cogent finding in this regard, the loans received through banking channel from the lenders who have been assessed to income tax cannot be disbelieved and cannot be regarded as accommodation entries. In view of the above, the addition of Rs. Rs. 10,57,30,847 /- u/s 68 of the Act made by the AO on account of unexplained cash credit cannot be sustained and the same is deleted. Hence, Ground No.1 to 6 and 9 are allowed.” 3.2 Aggrieved with the order of Ld. CIT(A), the Revenue has filed the present appeal before the Tribunal. 4. Before us, Ld. DR has submitted that even though confirmations and other documents were submitted by the assessee, it could not prove the creditworthiness of these lenders. He further pointed out that the lenders had shown very meagre income during the year under consideration and thus their creditworthiness remained unsubstantiated considering the large amounts advanced by each of these entities. He, therefore, contended that the Ld. AO has rightly added these loans u/s 68 of the Act. 5. On the other hand, Ld. AR has strongly relied on the order of Ld. CIT(A). He has submitted that the assessee was not required to prove source of the source and that the relevant provisions in this regard was introduced much later i.e. w.e.f., A.Y. 2023-24. Even then, the assessee has submitted the following documents in respect of all the three entries: Printed from counselvise.com 1735_DEL_2025_ACIT VS TECHNO FAC CONTRACTS PRIVATE LTD 5 | P a g e i. Confirmation of lenders ii. Bank statement of lenders iii. ITR & financials of the lenders iv. PAN Card v. Master data from MCA website vi. Import Export Code vii. GST Certificate viii. Assessment order of Lender ix. Details of Repayment of loan These documents have been again filed in the form of paperbook before us. Ld. AR has further submitted that interest was also paid on these loans and TDS duly deducted by the assessee. Moreover, impugned loans were not raised during the year under consideration but represented running loan accounts from earlier years. Further no adverse view was taken in respect of impugned loan transactions in the scrutiny assessments of the lenders completed u/s 143(3)/148/ 153A of the Act. Finally, the loans have been repaid in the subsequent years. 6. We have heard the rival submissions and perused the material placed on record. After considering the supporting documents filed by the Ld. AR in the form of paperbook, in respect of each of the lenders, we are of the considered view that initial onus to establish the identity and creditworthiness of the lenders as well as genuineness of the transaction had been adequately discharged by the assessee. Thereafter, Ld. AO has not brought any material on record to show that the impugned transactions were Printed from counselvise.com 1735_DEL_2025_ACIT VS TECHNO FAC CONTRACTS PRIVATE LTD 6 | P a g e not genuine. We, therefore, hold that the Ld. CIT(A) was justified in deleting the impugned addition after considering the entirety of facts and circumstances of the case. 7. In the result, the appeal of the revenue is hereby dismissed. Order pronounced in the Open Court on -02-2026. Sd/- Sd/- (YOGESH KUMAR US) (RENU JAUHRI) Judicial Member Accountant Member Dated: 25.02.2026 Pooja Mittal Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi Printed from counselvise.com "