DCIT,CIRCLE-34(1), DELHI V. MUKEAH KUMAR SINGLA, DELHI

ITA 2225/DEL/2023

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax against Shri Mukesh Singla concerning the assessment year 2016-17. The primary contention was regarding the treatment of unsecured loans as unexplained cash credit under section 68 of the Income Tax Act, 1961, and unexplained expenditure under section 69C. The Assessing Officer had initially added a substantial amount to the assessee's income, citing lack of satisfactory explanation regarding the loans' identity, genuineness, and creditworthiness. However, the CIT(A) found merit in the assessee's appeal, reducing the addition significantly after the assessee provided additional evidence, which the Assessing Officer failed to adequately contest. The Tribunal upheld the CIT(A)'s decision, dismissing the Revenue's appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714371 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ TIWARI
• Keywords: Additional evidence; Unexplained cash credit; Unexplained expenditure; Salary income; TDS
• Section: 68; 69C

Judgement Text

"Page 1 of 7 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘E’ BENCH, NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 2225/DEL/2023 [A.Y. 2016-17] The Dy. C.I.T Vs. Shri Mukesh Singla Circle – 34(1) 148/12, Sector 21, Rohini Delhi New Delhi PAN – AOBPS 5709 P (Applicant) (Respondent) Assessee By : None Department By : Shri Manoj Tiwari, Sr. DR Date of Hearing : 30.07.2025 Date of Pronouncement : 06.08.2025 ORDER PER NAVEEN CHANDRA, A.M:- This appeal by the assessee is preferred against the order of NFAC, Delhi dated 05.06.2023 for A.Y 2016-17. Printed from counselvise.com ITA No. 2225/DEL/2023 [A.Y. 2016-17] Amit Behal Vs. ACIT Page 2 of 7 2. The grounds raised by the assessee read as under: “1 The Ld. AO has erred in law in treating the un secured loans of Rs. 43606455 as unexplained cash credit under section 68 of the IT Act of the appellant arbitrarily, illegally and without any basis 2. The Assessing Officer failed to appreciate that Rs. 2434157 was paid by the appellant as Interest on Loan taken by the assessee for his business profession and the due TDS was also deducted and deposited under the provisions of the I.T Act.” 3. Briefly stated, the facts of the case are that the assessee is engaged in the business of trading of rock salt as well as black salt. The assessee also trades in share and commodity. The income of the assessee constitutes income from salary, house property and income from business. The assessee electronically filed his return declaring total income at Rs. 35,35,180/- on 18.11.2016. The case was selected for scrutiny assessment through CASS and accordingly, statutory notices were issued and served upon the assessee. The assessment was completed on 22.12.2018 at an assessed income of Rs.4,95,75,792/-. Printed from counselvise.com ITA No. 2225/DEL/2023 [A.Y. 2016-17] Amit Behal Vs. ACIT Page 3 of 7 4. The Assessing Officer made an addition on account of unexplained cash credit u/s 68 of the I.T. Act, 1961 amounting to Rs. 4,36,06,455/- on unsecured loans and unexplained expenditure u/s 69C of the Income- tax Act, 1961 [the Act, for short] amounting to Rs. 24,34,157/- on the ground that all the three ingredients of section 68 of the Act, namely identity, genuineness of transactions and credit worthiness of the parties have not been explained satisfactorily. 5. Aggrieved, the assessee went in appeal before the ld. CIT(A) and furnished additional evidences in support of the unsecured loan, which were forwarded to the Assessing Officer for his perusal and remarks. 6. The Assessing Officer failed to submit the desired report even after two months. The ld. CIT(A), therefore, admitted the additional evidences and adjudicated the issues before him giving relief to the assessee. It would be pertinent to reproduce the relevant portion of the order of the ld. CIT(A) which read as under: “7. The assessment order and the submission made by the appellant were carefully examined and perused. It is observed that the AO made addition u/s 68 without mentioning the details of lenders in Printed from counselvise.com ITA No. 2225/DEL/2023 [A.Y. 2016-17] Amit Behal Vs. ACIT Page 4 of 7 which the confirmations, ledger accounts and bank accounts were not received. The AO made a general statement stating that \"Further, he has submitted some copy of confirmations of unsecured loans taken from persons. He has not submitted any other details like copy of income tax return, copy of ledger account, copy of loans agreements and bank statements of the person to justify/substantiate the creditworthiness, genuineness and identity of the persons from whom he has taken unsecured loans during the year.\" Since the AO had made only a sweeping statement and had not mentioned any details of the addition, the AO was asked twice during appeal proceedings to comment upon the submissions made by the appellant by drawing his attention to the detailed list of creditors along with the attendant documents like confirmations, ledger accounts copies, ITRs bank statements, etc. However there is no response from the AO. After going through the submissions of the appellant it is observed that the appellant had discharged his onus u/s 68 and u/s 69C of the IT Act by submitting the necessary documents to justify the creditworthiness, genuineness and identity of 37 lenders mentioned in the table in para 5, except in the case of Sh. Sachin Kumar Aggarwal (SI. No. 33) where the confirmation and bank account details were not provided for the loan received amounting to Rs. 2,44,461/-. Accordingly, the addition u/s 68 can be sustained only to The extent of Rs. 2,44,461/-. Printed from counselvise.com ITA No. 2225/DEL/2023 [A.Y. 2016-17] Amit Behal Vs. ACIT Page 5 of 7 Hence, the appeal is being partly allowed restricting the addition made by the AO u/s 68 to Rs. 2,44,461/- pertaining to the alleged loan received from Sh. Sachin Kumar Aggarwal. 8. None appeared for and on behalf of the assessee. So we heard the ld. DR at length. 9. Before us, the ld. DR strongly supported the findings of the Assessing Officer and read the relevant part of the assessment order. It is the say of the ld. DR that the ld. CIT(A) has accepted the submissions of the assessee without any justification. 10. We have heard the submissions of the ld. DR and have perused the relevant material on record. We find that the ld. CIT(A) had forwarded the additional evidences in support of the loans to the Assessing Officer for examination and adjudication. However, the same was not conducted by the Assessing Officer. We, therefore, agree with the ld. CIT(A) that the assessee has furnished the necessary documents and discharged the onus cast upon him. Accordingly, we are of the considered view that the ld. CIT(A) was justified in giving relief to the Printed from counselvise.com ITA No. 2225/DEL/2023 [A.Y. 2016-17] Amit Behal Vs. ACIT Page 6 of 7 assessee. We, therefore, decline to interfere with the order of the ld. CIT(A). Grounds raised by the Revenue are dismissed. 11. In the result, the appeal of the Revenue in ITA No. 2225/DEL/2023 is dismissed. The order is pronounced in the open court on 06.08.2025. Sd/- Sd/- [MADHUMITA ROY] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 06th AUGUST, 2025. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Printed from counselvise.com ITA No. 2225/DEL/2023 [A.Y. 2016-17] Amit Behal Vs. ACIT Page 7 of 7 Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order . 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member 3. Date on which the typed draft Tribunal Order is placed before the other Member 4. Date on which the approved draft Tribunal Order comes to the Sr. P.S./P.S. 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9. Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial) 11. The date on which the file goes for xerox 12. The date on which the file goes for endorsement 13. The date on which the file goes to the Superintendent for checking 14. The date on which the file goes to the Assistant Registrar for signature on the Tribunal order 15. Date on which the file goes to the dispatch section 16. Date of Dispatch of the Order Printed from counselvise.com "