DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, KOTA, KOTA V. RISHIRAJ SINGH, JHALAWAR

ITA 1073/JPR/2025

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax against Rishiraj Singh concerning the assessment year 2023-24. The primary issues revolved around the classification of certain expenditures as capital or revenue, the substantiation of expenses claimed, and the treatment of unsecured loans and sundry creditors under section 68 of the Income Tax Act. The AO had made several additions to the income of Rishiraj Singh, which were contested and subsequently deleted by the CIT(A). The Tribunal examined the submissions, evidence, and the legal provisions applicable, ultimately agreeing with the CIT(A)'s findings and dismissing the appeal by the revenue.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787260 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2023-2024
• Appeal Filed On: 28-07-2025
• Other Referred Cases: CIT vs Ayachi Chandrashekhar Narsangji, PCIT v Ambe Tradecorp Private Limited, Ashok Kumar Jain Vs. ITO, Commissioner of Income Tax Vs. Jagatjit Industries Ltd., CIT vs. Pancham Das Jain, PCIT Vs Sh. Kulwinder Singh
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV AWASTHI
• Assessee Lawyers: VINOD GUPTA; MOHD. AZHARUDDIN; WAY OF INCURRING SUCH; TREATING; WAY OF INCURRING
• Keywords: Additional evidence; Revenue expenditure; Business expenditure; Question of law; Unexplained cash credit; Rejection of books of accounts; Rule of consistency; Gift; Capital expenditure; FORM 26AS
• Section: 143(3); 68; 133(6); 43B

Judgement Text

" vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh]U;kf;d lnL; ,oa JhjkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;djvihyla-@ITA No. 1073/JP/2025 fu/kZkj.ko\"kZ@Assessment Year : 2023-24 Deputy Commissioner of Income Tax, Circle-02, Kota cuke Vs. Rishiraj Singh 0, Ravle Ka Chouk Dahikhera, Jhalawar LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.:AKUPR4489E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Sh. Vinod Gupta, CA & Mohd. Azharuddin, CA jktLo dh vksjls@Revenue by: Sh. Gaurav Awasthi, JCIT lquokbZ dh rkjh[k@Date of Hearing : 27/10/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 19/11/2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM The present appeal is preferred by the revenue, on being dissatisfied with the finding so recorded in the order of the National Faceless Appeal Centre, Delhi [here in after ld.‘CIT(A)] dated 20/06/2025 for assessment year 2023-24. The said order of the ld. CIT(A) arises as against the order dated 24.03.2025 passed under section 143(3) of the Income Tax Act, Printed from counselvise.com 2 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh 1961 [ for short Act] by the assessment unit of Income Tax Department [ for short AO]. 2. In this appeal, the revenue has raised following grounds: - 1) Whether on the facts and circumstances of the case, the Ld. CIT(A). NFAC, was justified in deleting the addition of Rs. 10,81,635/-made by the AO on account of disallowance of Toll Equipment expenditure as the genuineness of expenditure was not established and also the expenditure cannot be treated as of revenue nature. 2) Whether on the facts and circumstances of the case, the Ld. CIT(A), NFAC, was justified in deleting the addition of Rs. 61,36,307/-made by the AO on account of Toll expenses as the assessee was bound to furnish the proper accounting alongwith supporting documentary evidences to claim the expenditure. 3) Whether on the facts and circumstances of the case, the Ld. CIT(A), NFAC, was justified in deleting the addition of Rs. 1,71,70,816/- made by the AO on account of unexplained cash credit u/s 68 of the I.T. Act as the creditworthiness of the lenders to extend such huge loans remains unsubstantiated looking to the total income declared in the ITRs and the lender's credence for having enough funds at disposal of the lender to extend the loan. 4) Whether on the facts and circumstances of the case, the Ld. CIT(A). NFAC, was justified in deleting the addition of Rs. 48,38,133/-made by the AO on account of Sundry Creditors ignoring the fact that the assessee has failed to furnish the details of the creditors alongwith ledgers, confirmations & supporting documents to prove their identify, nature of liability. Also, the CIT (A) accepted the additional evidences without providing opportunity to the AO to verify the same and submit his report on additional evidences.\" 3. Succinctly, the fact as culled out from the records is thatthe assessee Sri Rishiraj Singh (PAN: AKUPR4489E) filed return of income u/s 139(1) of the Income Tax Act on 05.10.2023 reporting total income of Rs. 2,13,72,030/-. Thereafter, the case of the assessee was selected for scrutiny through CASS to primarily verify the issue of 'Business Expense' and thereby the statutory notices as required were issued from time to time. Printed from counselvise.com 3 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh Record reveals that the assessee is engaged in business of managing and operating several toll plazas and has submitted the financials, ledgers of the expenses claimed, bank account statements, GST returns, EPF challan copies, NHAI work order copies. Ld. AO noted that the assessee has not provided complete information as called for. Ld. AO noted that the assessee has claimed expenditure of Rs. 10.81,635/- under head Toll Equipment. On being asked to the assessee, he submitted that \"Toll equipment such as receipt machines, computer systems, and such other equipment are the mainstay of the business and endure a hard and strenuous lifeperiod. Hence, some of such equipment do not survive the course of a full F.Y. and require replacing during the year. Therefore, they have been appropriately classified as revenue expenditure”. Ld. AO noted that the assessee has not submitted any ledger or receipts/ invoices in support of your claim of expenditure. Ld. AO noted that the assessee for the contention that machines and computer systems donot survive for full FY and hence the same were revenue expenditure doesnot seem to be reasonable explanation as the machines once purchased would be used for several years and since that claim was not properly supported by documentary evidence the said expenditure was considered as capital in Printed from counselvise.com 4 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh nature and thereby the same was added so for Rs 10,81,635/- to the total income of the assessee. Ld. AO noted that the expenditure seems to be similar to that of the expenditure claimed under head 'Miscellaneous Expenses”.Since the assessee has not submitted any ledger or receipts/ invoices in support of their claim of expenditure in view of the fact thatassessee claimed petty expenses under head Miscellaneous Expenses and the said expenditure being not supported by documentary evidence, a show cause notice was given as to why the amount of Rs. 61,98,289/-shall not be disallowed and added back to the total income of the assessee and ultimately ld. AO made the addition to the income of the assessee. The assessee has taken unsecured loans of Rs. 4,00,21,487/-, for which the assessee was asked to furnish the supporting documents to prove the creditworthiness of the unsecuredloans lenders. As observed by the ld. AO that assessee has not furnished any documentary evidence such as PAN, Return of Income of the lenders to prove their creditworthiness On perusal of your return of income for AY 2022-23, it is noticed that the assessee has reported unsecured loans of Rs. 3,12,92.185/- Further, as per return of income for AY 2023-24, assessee reported unsecured loans of Rs 4,00,21,487/- which means an amount of Printed from counselvise.com 5 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh Rs 87,29,302/- (4,00,21,487 (-) 3,12,92,185) has been received by you in the form of unsecured loan during the year under consideration. Althoughyou were requested to furnished documentary evidence such as PAN, Return of Income of the lenders to prove their creditworthiness, you have not furnished the same. In this regard, please showcause as to why the amount of Rs. 87,29,302/- shall not be treated as unexplained cash credits u/s 68 of the Income Tax Act and taxed accordingly. Ultimately, after considering the submission of the assessee ld. AO made the addition of Rs. 1,71,70,816/-. Ld. AO noted that the as per the ITR sundry creditors of Rs. 10,09,60,423/ were reflected in the account of the assessee and therefore, assessee was requested to furnish the details of the creditors along with ledgers with confirmations & supporting documents to prove their identity, nature of liability. Since the assessee has not furnished any details and documentary evidence. Ld. A.O. after considering the return of income for AY 2022-23 filed he noted that assessee has reported 'sundry creditors of Rs. 9,61,21,990/-. Further, as per return of income for AY 2023-24, assessee reported sundry creditors of Rs. 10,09,60,423/- which means an amount of Rs 48,38,433/- (10,09,60,423 (-)9,61,21,990) has been recorded in your books of accountsfor whose documentary evidence was not Printed from counselvise.com 6 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh furnished and for that assessee was given showcause notice stating as to why the amount of Rs. 48,38,133/- shall not be treated as unexplained cash credits u/s 68 of the Act and he taxed the same accordingly. As regards the expenditure of Rs. 10,.81,635/- claimed under head Toll Equipment, the assessee was asked to show cause as to why the said expenditure shall not be disallowed it being capital in nature. In response, the assessee has responded such toll equipment expenses being charged to revenue expenditure are utilized in the day-to-day running of the various toll plazas. These are not normal machines being used in a typical environment. These are mostly toll receipt printing machines, automated barmers, processing systems, computer systems, display monitors, scanners, camera equipment, etc which are subjected to constantrough usage throughout their lifetime. They are mostly used by the staff employed at the toll plazas, and hence, they are very poorly maintained or cared for, one of the drawbacks of the nature of such business. As previously submitted, such expenditure is incurred on the upkeep and smooth functioning of the various toll equipment put into place at the various Toll Plazas operated and managed by the assessee Such expenses may include but not be limited to replacement parts for the machines, general consumables relating to such equipment and such other items that ensure Printed from counselvise.com 7 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh proper working of the machines. The contention raised by the assessee wereperused and were found not acceptable by the ld. AO. This was because the basic necessity to claim expenditure is to prove with documentary evidence that the assessee has actually incurred said expenditure. However, assessee has not furnished any ledger or receipts/ invoices in support of his claim of said expenditure. Further, assessee's submission that machines and computer systems donot survive for full FY and hence the same are revenue in expenditure doesnot seem to be reasonable explanation as the machines once purchased would be used for several years. The assessee's submission that the equipment are poorly maintained by the toll staff and hence is claiming this expenditure was not acceptable because the assessee claimed the expenditure under head Repairs to machinery which means the equipment if malfunctioned are repaired and re-used. A prudent business man would try to minimize his expenses to maximize his profits. If machinery gets malfunctioned, first priority would be to get it repaired rather than buying a new one. As the assessee has already claimed the expenditure under head repairs and also the said expenditure incurred for purchase of equipment is capital in nature, the submission of the assessee therefore was not considered by the ld. AO. Further as the assessee has not furnished any documentary evidence Printed from counselvise.com 8 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh in support of claim of the said expenditure, the amount of Rs. 10,81,635/- was disallowed and added back to the total income of the assessee. 4. The assessee challenges the above finding of the ld. AO, before the ld. CIT(A). The assessee contended the disallowance and/or addition before the ld. CIT(A) by making a detailed submission and after considering the submission of the assessee, the appeal filed by the assessee was partly allowed and the relevant finding of the ld. CIT(A) reads as follows: 6. Decision: I have considered the facts of the case, written submission and case laws relied upon by the appellant as against the observations and findings of the AO in the assessment order. The submissions and contentions of the appellant are discussed and decided as under:- 6.1 Ground No. 1: It is general in nature and is hereby dismissed. 6.2 Grounds No.2: The assessing officer has disallowed Rs. 10,81,635/- claimed by the assessee under the head toll equipment stating that such expenditure is capital in nature. The assessee has submitted that toll equipment expenditure is mostly on account of toll receipt printing machines, automated barriers, processing systems, camera equipment etc. and the useful life of such equipment is less than one year due to the nature of the business of the assessee. The assessee has further submitted that such expenditure does not create any asset and such toll equipment expenditure constitutes only 0.097% of the total revenue and has been incurred through banking channels. The submissions of the assessee have been perused and it is observed that the submissions of the assessee have the merit and substance. Accordingly disallowance of Rs. 10,81,635/- made by the AO on account of toll equipment expenditure is hereby deleted and ground no. 2 is allowed. 6.3 Grounds No.3: The assessing officer has disallowed Toll expenses of Rs.61,98,289/-, The assessee has submitted the copy of ledger account and bank account statement to justify the incurrence of such expenses. It is also seen that the assessee had claimed expenses of Rs 1,05,46,144/- during A.Y 2022-23 and the assessing officer has disallowed 1 percent of such expenses amounting to Rs. 1,05,461/- in the assessment order dated 06.02.2024 passed under Section 143(3) of the Income Tax Act, 1961. Accordingly, following the principles of Printed from counselvise.com 9 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh consistency. disallowance at the rate of 1 percent of Rs. 61,98,289/- which comes to Rs. 61,982/-is hereby sustained and disallowance of Rs. 61,36,307/-(Rs. 61,98.289-Rs. 61,982) is deleted. Accordingly ground no. 3 is partly allowed. 6.4 Grounds No.4: The assessing officer has made the addition of Rs. 1,71,70,816/-under Section 68 of the income tax Act, 1961 on account of unsecured loans taken by the assessee from ten parties namely i) Dharam Raj Gochar, ii) Dharmendra Singh, iii) Dushyant Singh, iv) Dwarika Filling Station, v) Kailash Upadhyay, vi) Prachi Agarwal, vii) Ruturaj Shakhtawat, viii) Ruchika Jain ix) Shailendra Kumar Agrawal and x) Shriddha Construction alleging that the assessee failed to prove the creditworthiness of the lenders. The assessee has submitted that un-secured were loan taken him during the normal course of business and through banking channels The assessee has submitted that entire loans have been repaid in the same year or succeeding years. The assessee had filed the relevant documents to prove creditworthiness of the lenders. The assessee has relied upon various case laws in support of his contentions and submissions. The submissions filed by the assessee and the documents have been perused. It is seen that the assessee furnished sufficient documentary evidences to discharge hisonus as required under Section 68 of the Income Tax Act, 1961. It is also noticed that all the loans taken by the assessee during the relevant year have been repaid during the same year or in the subsequent years. The assessee gets support from the decisions of Hon'ble High Court of Gujarat in the cases of CIT vs AyachiChandrashekharNarsangji Tax Appeal No. 992 OF 2013 and PCIT v Ambe Tradecorp Private Limited R/Tax Appeal No. 306 of 2022. Hon'ble High Court of Gujarat observed in the case of AmbeTradecorp\"Once repayment of the loan has been established based on the documentary evidence, the credit entries cannot be looked into isolation after ignoring the debit entries despite the debit entries were carried out in the later years The above observations of Hon'ble High Court are squarely applicable to the instant case. Accordingly, the addition of Rs. 1,71,70,816/-made by the AO under Section 68 is hereby deleted. 6.5 Grounds No.5: The assessing officer has made the addition of Rs. 48,38,133/- on account of sundry creditors. This assessee has submitted that majority of the Sundry Creditors are Government Authorities and such creditors have been paid in succeeding years through banking channels and were outstanding on account of genuine business transactions The submissions filed by the assessee and the assessment documents have been perused. It is seen that the Sundry Creditors have been settled in the succeeding year. Therefore, any addition on account of outstanding sundry creditors is not permissible in the eyes of law Accordingly, the addition of Rs. 48,38,133/- is hereby deleted and ground No. 5 is allowed. Printed from counselvise.com 10 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh 6.6 Ground No.6 & 7: These grounds are consequential and general in nature and do not require to be adjudicated. 7. The appeal of the appellant is Partly allowed. 5. The ld DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the assessing officer. As regards the Toll Equipment expenses considered as capital expenditure by the ld. AO and ld. CIT(A) considered it as allowable without considering any evidence vide para 5.1 of his order. As regards the disallowance out of miscellaneous expenditure he supported the order of the assessing officer. As regards the contention that the assessee has repaid the loan but the cash credit were not supported by sufficient evidence and while deleting the addition ld. CIT(A) has not called for any remand report. Even the finding of the ld. CIT(A) while directing to delete the addition on account sundry creditors he has not accepted the version that the same were paid will not justified the deletion of the addition. 6. Per contra, ld. AR of the assessee supported the detailed finding recorded in the order of the ld. CIT(A) and has filed a detailed written submission to support the finding so recorded in the order of the ld. CIT(A). The written submission so filed reads as follows: Grounds of Appeal, filed by the Departmental, have been dealt as under: Ground of Appeal No.1 Printed from counselvise.com 11 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh Whether on the facts and circumstances of the case, the Ld. CIT(A), NFAC, was justified in deleting the addition of Rs. 10,81,635/- made by the AO on account of disallowance of Toll Equipment expenditure as the genuineness of expenditure was not established and also the expenditure cannot be treated as of revenue nature. Findings of the AO: Page 5 of the Assessment Order “The above submission of the assessee is perused and found not be acceptable. This is so because the basic necessity to claim expenditure is to prove with documentary evidence that the assessee has actually incurred said expenditure. However, assessee has not furnished any ledger or receipts/ invoices in support of his claim of said expenditure. Further, assessee’s submission that machines and computer systems do not survive for full FY and hence the same are revenue in expenditure does not seem to be reasonable explanation as the machines once purchased would be used for several years. The assessee’s submission that the equipment are poorly maintained by the toll staff and hence is claiming this expenditure is not acceptable because the assessee is claiming the expenditure under head ‘Repairs to machinery’ which means the equipment if malfunctioned are repaired and reused. A prudent business man would try to minimize his expenses to maximize his profits. If a machinery gets malfunctioned, first priority would be to get it repaired rather than buying a new one. As the assessee has already claimed the expenditure under head ‘repairs’ and also the said expenditure incurred for purchase of equipment is capital in nature, the submission of the assesssee is not acceptable. Further, as the assessee has not furnished any documentary evidence in support of claim of the said expenditure, the amount of Rs. 10,81,635/- is disallowed and added back to the total income of the assessee. … As already discussed above, the assessee is already claiming the expenditure under head ‘repairs’ and the same is being allowed. This caselaw doesnot apply to the assessee as the assessee is claiming the expense to purchase new equipment under head ‘Toll equipment’ and it is of capital in nature and accordingly, the same is not allowable.” Findings of the CIT(A): “6.2 Grounds No.2: The assessing officer has disallowed Rs. 10,81,635/- claimed by the assessee under the head toll equipment stating that such expenditure is capital in nature. The assessee has submitted that toll equipment expenditure is mostly on account of toll receipt printing machines, automated barriers, processing systems, camera equipment etc. and the useful life of such equipment is less than one year due to the nature of the business of the assessee. The assessee has further submitted that such expenditure does not create any asset and such toll equipment expenditure constitutes only 0.097% of the total revenue and has been incurred through banking channels. The submissions of the assessee have been perused and it is observed that the submissions of the assessee have the merit and substance. Accordingly, disallowance of Rs. Printed from counselvise.com 12 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh 10,81,635/- made by the AO on account of toll equipment expenditure is hereby deleted and ground no. 2 is allowed.” Submission: 1. As admitted in the orders of the lower authorities that the respondent is engaged in the business of managing and operating Toll Plazas. During the course of assessment, the AO noticed that the respondent had claimed expenditure amounting to Rs. 10,81,635/- on account of ‘Toll Equipment Expenses’ and claimed the same as revenue expenditure. 2. The Ld. AO issued notices, requiring the assessee to explain why the claim of expenditure on account of purchase of toll equipment should not be disallowed as revenue expenditure. Before the AO, the respondent submitted that the toll equipment expenses are utilized in the day-to-day running of the various toll plazas and considering the nature of business of the respondent and the nature of expenditure, these expenses are being charged to revenue expenditure. The Ld. AO however rejected the respondent’s contention and disallowed the expenditure of Rs. 10,81,635/- for want of documentary evidence and treating it as a capital expenditure. The observation made by the Ld. AO has already been re-produced above. 3. In appeal before the CIT(A), the respondent reiterated the above submission and the Ld. CIT(A), after taking into account the nature of business and the submission made by the respondent, deleted the addition of Rs. 10,81,635/-, made by the Ld. AO. 4. The respondent, before the Hon’ble Bench, humbly submits as under: a. Toll equipment expenses being charged to revenue expenditure are incurred on various toll equipments utilized in the day to-day running of various toll plazas. These equipments are mostly toll receipt printing machines, automated barriers, processing systems, computer systems, display monitors, scanners, camera equipment, etc. which are subjected to wear and tear due to constant rough usage throughout their lifetime. The expenses of Rs. 10,81,635/- was incurred for the upkeep and smooth functioning of these toll equipments placed at various toll plazas of the respondent. b. It is pertinent to note that neither any asset has been created through such expenses nor any enduring benefit has accrued to the respondent by way of incurring such expenditure. c. Further, the toll equipments expenditure have been incurred on replacement of existing machines/ parts thereof since such machines/ parts thereof needed frequent replacement and these expenses are incurred on routine basis. Therefore, expenditure Printed from counselvise.com 13 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh incurred thereon would certainly fall under revenue expenditure hence, they had been appropriately classified as revenue expenditure. Our contention gets support from the following judgements:  The Hon’ble ITAT, Delhi in the case of Ashok Kumar Jain Vs. ITO [ITA No. 396/Del/2023] vide order dated 31.03.2023 held as under: “9. From the facts and material placed before me, it is observed that the assessee has replaced old bulbs/tube lights with new LED lights. Some other expenditure was incurred for regular repair and replacement. Thus, from the nature of expenditure incurred, it is evident that they are in the nature of consumables and not for acquiring any assets of enduring nature. I am of the view, replacement of old tube light with LED lights cannot be treated as capital expenditure. Therefore, I do not find any reason to sustain the disallowance made by the Assessing Officer. Accordingly, I delete the disallowance of Rs.12,80,215. The ground is partly allowed.”  Delhi High Court in the case of Commissioner of Income Tax Vs. Jagatjit Industries Ltd. [2000] 241 ITR 556 wherein the Hon'ble High Court observed as under: “Whether on given set of facts, replacement of certain items, forming an integral or important part of the machinery would be revenue expenditure or capital expenditure is primarily a question of fact, to be decided in the context of the business carried on by an assessee. Merely, because the benefit accruing by the expenditure is of enduring nature, is by itself not a conclusive test to hold it as a capital expenditure (see Empire Jute Co Ltd. v. CIT [1980] 124 ITR 1 (SC)]. Normally initial investment on machines and their parts will be in the nature of capital expenditure but replacement of parts of an existing machinery in the course of their working will be a revenue expenditure. In the instant case having regard to the nature of the business of the assessee and applying the principle of law enunciated in Mysore Spun Concrete Pipe Pvt. Ltd.’s case [1992] 194 ITR 159 (Kar), the Tribunal has reached a conclusion that the moulds in question do not enhance the capacity of the existing machines and are merely replacements for the moulds damaged during the process of manufacture of glass. It is also evident from the format of the question proposed by the Revenue, that finding of the Tribunal to the effect that the expenditure in question was incurred by the assessee on the ‘replacement’ of the moulds is not under challenge.” (Emphasis Supplied) d. However, the Ld. AO disallowed the expenses on the basis of non-submission of documentary evidence without considering the fact that the books of the responded are already audited and certified by an independent Chartered Accountant. e. The Ld. CIT(A) also found merit and substance in the submission of the respondent and deleted the addition made by the Ld. AO since there was no substance in the contention of the Ld. AO. Therefore, we rely on the order of the Ld. CIT(A) in this regard. Printed from counselvise.com 14 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh f. Therefore, in view of the consistent view taken by various Courts/Tribunal that if no asset is created or no benefit is accrued to the assessee by way of expenditure, then the expenditure is to be held as revenue in nature. Ground of Appeal No.2 Whether on the facts and circumstances of the case, the Ld. CIT(A), NFAC, was justified in deleting the addition of Rs. 61,36,307/- made by the AO on account of Toll expenses as the assessee was bound to furnish the proper accounting alongwith supporting documentary evidences to claim the expenditure. Findings of the AO: Page 6 of the Assessment Order “The above submission of the assessee is perused and it is pertinent to note that basic necessity to claim expenditure is to prove with documentary evidence that the assessee has actually incurred said expenditure. However, assessee has not furnished any ledger or receipts/ invoices in support of his claim of said expenditure. The assessee in his submissions has submitted that it makes it very difficult to maintain records of smaller everyday expenses. In this regard, it is pertinent to mention that a business man keeps a record of all his expenses through accountant so that his business funds are not mis-utilized. In such a scenario, the assessee explanation that the assessee does not maintain records of the expense to the tune of Rs. 61,98,289/- does not seem to be reasonable explanation and thus is not acceptable. In absence of furnishing any documentary evidence in support of claim of the said expenditure, the amount of Rs. 61,98,289/- is disallowed and added back to the total income of the assessee.” Findings of the CIT(A): “6.3 Grounds No.3: The assessing officer has disallowed Toll expenses of Rs. 61,98,289/-. The assessee has submitted the copy of ledger account and bank account statement to justify the incurrence of such expenses. It is also seen that the assessee had claimed expenses of Rs. 1,05,46,144/- during A.Y. 2022–23 and the assessing officer has disallowed 1 percent of such expenses amounting to Rs. 1,05,461/- in the assessment order dated 06.02.2024 passed under Section 143(3) of the Income Tax Act, 1961. Accordingly, following the principles of consistency, disallowance at the rate of 1 percent of Rs. 61,98,289/- which comes to Rs. 61,982/- is hereby sustained and disallowance of Rs. 61,36,307/-(Rs. 61,98,289 - Rs. 61,982) is deleted. Accordingly. ground no. 3 is partly allowed.” Submission: 1. These expenses under consideration are of a petty and miscellaneous nature incurred in the ordinary course of business. For instances, expenses for refreshments, managing operational devices, performing small diagnostics and repairs, providing immediate assistance to the staff, cleaning and housekeeping expenses, upkeep of the Toll Printed from counselvise.com 15 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh Plazas and Booths, Maintenance of the premises, upkeep of flora etc. Due to their small denominations and diverse nature, these expenses have been grouped together for accounting convenience, which is a common and accepted practice in such operational environments. 2. It is pertinent to highlight that the total amount of such expenses accounts for only 0.557% of the total receipts of the respondent for the relevant period. Given the scale and nature of operations, this percentage is negligible and entirely justifiable. 3. All such expenses have been duly paid through banking channels. This fact is undisputed and has been explicitly acknowledged by the Ld. CIT(A) in his order. The banking channel payments substantiate the genuineness of the transactions and eliminate any suspicion of unaccounted or fictitious cash expenditure. As such, these transactions are part of the normal business course and are appropriately recorded in the books of accounts. 4. A peculiar point to be noted in this matter is that the case of the respondent was also selected for scrutiny for A.Y. 2022-23 and the AO himself has disallowed only 1% of toll expenses incurred by the respondent during the said year. However, under the current case, the Ld. AO disallowed the entire toll expenses without assigning any justification for this deviation despite the fact that there is neither any change in facts nor change in law from the A.Y. 2022-23. 5. It is a well-settled principle in income tax law that the “Rule of Consistency” must be adhered to in the income tax proceedings when the facts are not different. Judicial precedents have repeatedly upheld that arbitrary deviations from earlier assessments without valid reasons are not permissible. In line with this principle, and recognizing the unreasonable stance of the Ld. AO, the Ld. CIT(A) has restricted the disallowance to Rs. 61,982/-, being 1% of Rs. 61,98,289/-, thereby restoring parity with the treatment adopted in the previous year. 6. In support of our contention, we rely on the following case laws:  The Hon’ble ITAT, Mumbai, in the case of M/s ASI Industries Ltd. Vs. DCIT [ITA No. 2399/M/2021] vide order dated 20.09.2022 held as under: “29. In view of above undisputed facts, we are of the considered view that when expenses incurred by the assessee have otherwise not been specifically disputed and books of accounts have been admitted as correct and all the payments have been made through banking channel, the Revenue Department cannot proceed at its whims and fancies by making disallowance for one year and allowing the same expenses in other years. Revenue Department is required to follow the rule of consistency. In these circumstances, we are of the considered view that no ground for Printed from counselvise.com 16 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh making disallowance is made out, hence disallowance confirmed by the Ld. CIT(A) in A.Y. 2011- 12, 2012-13, 2013-14 & 2014-15 is ordered to be deleted.”  The Hon’ble ITAT, Ahmedabad, in the case of M/s ACIT (IT) Vs. Allscripts (India) Pvt. Ltd. [ITA No. 1373/Ahd/2024] vide order dated 07.02.2025 held as under: “9. As noted, during the course of the proceedings before us, the ld.DR has not brought to our notice any material change in facts or law distinguishing the present assessment year from AY 2013-14. In the absence of any variation in the factual or legal matrix, it would be impermissible to take a contrary view for the subsequent assessment year i.e. present year under consideration. Accordingly, applying the well-established principle of consistency in judicial discipline, we uphold the order of the ld.CIT(A) and dismiss the Revenue’s appeal.”  The Hon’ble ITAT, Delhi in the case of ACIT Vs. M/s IHDP Globals Pvt. Ltd. [ITA No. 331/DEL/2021] vide order dated 07.02.2025 held as under: “18. Under the facts and circumstances as discussed above, we find that the main business of the assessee is manufacturing and trading of carpets, and rental income is only a side activity. We also find that the contention of the ld. counsel for the assessee that since the assessee has been offering the rent received to tax under the head house property since 2007, the rule of consistency has to be followed in the income tax proceedings unless there are compelling/convincing reasons for deviating from the view consistently being held, has substance. Nothing has been brought on record by the A.O. or the ld DR before us to prove that there is any variation in the facts of the case as compared to the earlier or subsequent years wherein the rental income has been assessed to tax under the head House Property. We are therefore, of the considered view that since there is no change in the facts of the case, the rule of consistency applies in accordance with Hon’ble Supreme Court in the case of Radhaswami Satsang vs. CIT (supra).” Ground of Appeal No.3 Whether on the facts and circumstances of the case, the Ld. CIT(A), NFAC, was justified in deleting the addition of Rs. 1,71,70,816/- made by the AO on account of unexplained cash credit u/s 68 of the I.T. Act as the creditworthiness of the lenders to extend such huge loans remains unsubstantiated looking to the total income declared in the ITRs and the lender’s credence for having enough funds at disposal of the lender to extend the loan. Findings of the AO: Page 8 To 12 of the Assessment Order 1. Creditors who have not filed their Income Tax Returns: As the lenders has not filed return of income for AY 2023-24, the creditworthiness of the lender cannot be relied upon. The onus lies on the assessee to prove the creditworthiness of the lender. In absence of proving the creditworthiness of the lender, the amount of loan is treated as unexplained cash credits u/s 68 of the Income Tax Act and added back to the total income of the assessee. Printed from counselvise.com 17 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh 2. Creditors who have filed their Income Tax Returns but their income is less than the amount of loan: The assessee has also not furnished the complete financials of the said lender. Hence, it is verified from the Department database. As the assessee has not furnished the complete return of income of lenders along with its financials to prove its creditworthiness, the amount of loan is treated as unexplained cash credits u/s 68 of the Income Tax Act and added back to the total income of the assessee. Findings of the CIT(A): “6.4 Grounds No.4: The assessing officer has made the addition of Rs. 1,71,70,816/- under Section 68 of the income tax Act, 1961 on account of unsecured loans taken by the assessee from ten parties namely i) Dharam Raj Gochar, ii) Dharmendra Singh, iii) Dushyant Singh, iv) Dwarika Filling Station, v) Kailash Upadhyay, vi) Prachi Agarwal, vii) Ruturaj Shakhtawat, viii) Ruchika Jain ix) Shailendra Kumar Agrawal and x) Shriddha Construction alleging that the assessee failed to prove the creditworthiness of the lenders. The assessee has submitted that un- secured were loan taken him during the normal course of business and through banking channels. The assessee has submitted that entire loans have been repaid in the same year or succeeding years. The assessee had filed the relevant documents to prove creditworthiness of the lenders. The assessee has relied upon various case laws in support of his contentions and submissions. The submissions filed by the assessee and the documents have been perused. It is seen that the assessee furnished sufficient documentary evidences to discharge his onus as required under Section 68 of the Income Tax Act, 1961. It is also noticed that all the loans taken by the assessee during the relevant year have been repaid during the same year or in the subsequent years. The assessee gets support from the decisions of Hon’ble High Court of Gujarat in the cases of CIT vs. Ayachi Chandrashekhar Narsangji Tax Appeal No. 992 OF 2013 and PCIT v. Ambe Trade corp Private Limited R/Tax Appeal No. 306 of 2022. Hon’ble High Court of Gujarat observed in the case of Ambe Trade corp \"Once repayment of the loan has been established based on the documentary evidence, the credit entries cannot be looked into isolation after ignoring the debit entries despite the debit entries were carried out in the later years.” The above observations of Hon’ble High Court are squarely applicable to the instant case. Accordingly, the addition of Rs. 1,71,70,816/- made by the AO under Section 68 is hereby deleted.” Submission: 1. During the assessment proceedings, the Ld. AO, vide show cause notice dated 14.02.2025, called upon the respondent to furnish documentary evidence to establish the creditworthiness of the lenders. In response, the respondent submitted a comprehensive compilation containing, inter alia, the names, PAN details, and confirmation letters from the respective lenders. Additionally, considering that the loans were undisputedly received through regular banking channels, the respondent also provided the necessary bank transaction details evidencing such receipts during the course of the assessment itself. Printed from counselvise.com 18 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh 2. Accordingly, the ‘Identity’ of the lenders stood established through PAN records and confirmations, while the ‘Creditworthiness’ was substantiated through their bank statements, which clearly reflected the availability of sufficient funds prior to the disbursal of loans to the respondent. It is crucial to highlight that there is no allegation by the Ld. AO suggesting that the credit balances in the lenders' accounts were created through cash deposits or fund rotation by the respondent. This further reinforces that the lenders were the genuine owners of the funds and had the capacity to advance the said loans. 3. With respect to the ‘Genuineness’ of the loan transactions, without prejudice to the above, it is respectfully submitted that the entire loan amounts were repaid by the respondent in the same or immediately succeeding financial year, and that too through proper banking channels. This factual aspect has neither been disputed by the department nor questioned in any manner and has, in fact, been duly acknowledged by the Ld. CIT(A) in his appellate order. Hence, when the loan transactions have been repaid in full via banking routes, there remains no scope for doubting their genuineness. 4. In light of the above, it is evident that the respondent has fully discharged the onus of proving the three foundational requirements u/s 68 of the Act, i.e., identity of the creditors, their creditworthiness, and the genuineness of the transactions. At this juncture, the respondent also draws the attention of the Hon’ble Bench to para 6.4 (pages 27–28) of the appellate order, where the Ld. CIT(A) has categorically recorded a finding that the respondent has furnished sufficient documentary evidence to discharge the onus u/s 68 of the Act. Therefore, once the appellate authority has appreciated the evidence and accepted its sufficiency, no further burden lies upon the respondent. 5. Applying the above submission on the applicability of Section 68 of the Act, it is noteworthy that it is a settled legal position that once the assessee submits evidence in support of the identity, genuineness and creditworthiness, his ‘onus to proof’ is discharged and shifts to the revenue which was not discharged in the current case. Had there been any doubt regarding the creditworthiness of the lenders, the Ld. AO was fully empowered to invoke Section 133(6) of the Act and seek direct verification, to his satisfaction, from the lenders. However, no such step was taken during the assessment. 6. In view of the above, it is respectfully submitted that the invocation of Section 68 in the present case is misplaced and legally untenable, particularly when the respondent has not only furnished all relevant evidences but also repaid the loans through traceable banking channels. The addition made under Section 68, therefore, deserves to be deleted in full. Printed from counselvise.com 19 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh  The Hon’ble ITAT, Jaipur, in the case of DCIT Vs. Harsh Stock Portfolio Pvt. Ltd. [ITA No. 1084/JP/2024] vide order dated 02.01.2025, after relying on the judgment of the Hon’ble Gujarat High Court in the case of Principal Commissioner of Income-tax v. Ojas Tarmake (P.) Ltd,held as under: “9.2 As is evident from the above finding of the ld. CIT(A) the he has followed the decision of our jurisdictional high Court in the case of Shri Ram Singh (Supra) and the revenue has not challenged that finding of the ld. CIT(A). So far as merits of the case of the assessee ld. AR of the assessee submitted that the assessee has repaid those loans and that factual aspect of the case has not been denied before us by the ld. DR also. Thus, when the loans accepted were repaid in the same year no addition can be made as herein this case assessee showed unsecured loans received during relevant assessment year and AO made addition on ground that assessee failed to discharge onus of liability as laid down under section 68, since amount of loan received by assessee was returned to loan party during year itself and all transactions were carried out through banking channels, impugned addition was to be deleted to drive home to this contention ld. AR of the assessee serviced the decision of Gujarat High Court in the case of Principal Commissioner of Income-tax v. Ojas Tarmake (P.) Ltd., [ 156 taxmann.com 75 (Gujarat) ] wherein the court has held as under (Emphasis Supplied)  The Hon’ble ITAT, Jaipur, in the case of ITO, Jaipur Vs. Kedia Builders and Colonizers Pvt. Ltd. [ITA No. 872 to 875 & 901/JP/2024] vide order dated 11.03.2025 held as under: “49. Here it is also a matter of fact that the assessee – appellant has repaid back within a very short duration all the questioned loan. When loan stands repaid no addition under Section 68 can be made and is held by the judgment of Hon’ble Gujarat High Court in case of Rohini Builders [2002] 256 ITR 360 (Gujarat), wherein the court held that \"The genuineness of the transaction is proved by the fact that the payment to the assessee as well as repayment of the loan by the assessee to the depositors is made by account payee cheques and the interest is also paid by the assessee to the creditors by account payee cheques.\" Ground of Appeal No.4 Whether on the facts and circumstances of the case, the Ld. CIT(A), NFAC, was justified in deleting the addition of Rs. 48,38,133/- made by the AO on account of Sundry Creditors ignoring the fact that the assessee has failed to furnish the details of the creditors alongwith ledgers, confirmations & supporting documents to prove their identity, nature of liability. Also, the CIT(A) accepted the additional evidences without providing opportunity to the AO to verify the same and submit his report on additional evidences. Findings of the AO: Page 14 of the Assessment Order: Printed from counselvise.com 20 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh “Although the assessee has submitted the above submission, he has not furnished any documentary evidence such as ledger confirmed by the party. In absence of any documentary evidence, the submission of the assessee is not acceptable. On perusal of assessee’s return of income for AY 2022-23, it is noticed that assessee has reported ‘sundry creditors’ of Rs. 9,61,21,990/-. Further, as per return of income for AY 2023-24, assessee has reported sundry creditors of Rs. 10,09,60,423/- which means an amount of Rs. 48,38,433/- (10,09,60,423 (-)9,61,21,990) has been recorded in his books of accounts whose documentary evidence was not furnished by him. Although, assessee was requested to furnished documentary evidence, he has not furnished the same. In this regard, the amount of Rs. 48,38,133/- is treated as unexplained cash credits u/s 68 of the Income Tax Act and taxed accordingly.” Findings of the CIT(A): “6.5 Grounds No.5: The assessing officer has made the addition of Rs. 48,38,133/- on account of sundry creditors. This assessee has submitted that majority of the Sundry Creditors are Government Authorities and such creditors have been paid in succeeding years through banking channels and were outstanding on account of genuine business transactions. The submissions filed by the assessee and the assessment documents have been perused. It is seen that the Sundry Creditors have been settled in the succeeding year. Therefore, any addition on account of outstanding sundry creditors is not permissible in the eyes of law. Accordingly, the addition of Rs. 48,38,133/- is hereby deleted and ground No. 5 is allowed.” Brief Facts: 1. The respondent has reported Rs. 10,09,60,423/- under ‘Current Liabilities & Provisions’ in its Balance Sheet furnished for the year under consideration. 2. The Ld. AO, during the assessment noticed such outstanding liabilities and asked the respondent to furnish details of the creditors along with ledgers with confirmations & supporting documents to prove their identity, nature of liability. 3. Subsequently, the Ld. AO, vide notice dated 14.02.2025, proposed to add increment of Rs. 48,38,433/- in sundry Creditors from Rs. 9,61,21,990/- in A.Y. 2022-23 to 10,09,60,423/- in A.Y. 2023-24 by stating as under: “2.4.6) With respect to sundry creditors of Rs. 10,09,60,423/- , you were requested to furnish the details of the creditors along with ledgers with confirmations & supporting documents to prove their identity, nature of liability. However, you have not furnished any details and documentary evidence. On perusal of your return of income for AY 2022-23, it is noticed that you have reported ‘sundry creditors’ of Rs. 9,61,21,990/-. Further, as per return of income for AY 2023-24, you have reported sundry creditors of Rs. 10,09,60,423/- which means an amount of Rs. 48,38,433/- (10,09,60,423 (-)9,61,21,990) has been recorded in your books of accounts whose documentary evidence was not furnished by you. Although, you were requested to furnished Printed from counselvise.com 21 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh documentary evidence such you have not furnished the same. In this regard, please show cause as to why the amount of Rs. 48,38,133/- shall not be treated as unexplained cash credits u/s 68 of the Income Tax Act and taxed accordingly.” 4. In compliance to the notice, dated 14.02.2025, the respondent submitted his explanation and stated that the amount mentioned under the schedule ‘Current Liabilities & Provisions’ consist of the following: S. No. Particulars Amount 1. NHAI 8,13,21,165 2. RSRDC 1,91,94,077 3. Salary Payable 2,22,400 4. Sundry Expenses Payable 1,28,817 5. Total (A) 10,08,66,459 6. PF Payable 34,964 7. Pramod Lahoty& Company (Audit Fees) 59,000 8. Total (B) 93,964 9. Grand Total (A+B) 10,09,60,423 5. The Respondent further stated that the majority of the outstanding amount (approximately 99.65%) relates to the NHAI and RSRDC and only 0.35% (Rs. 3,51,217) relates to salary payable and sundry expense payable and the same was also paid off in the month of April, 2025. 6. The Ld. AO was not convinced with the explanation furnished by the respondent and accordingly added Rs. 48,38,133/- in the total income of the respondent by treating the same as unexplained cash credits u/s 68 of the Act. 7. In Appeal, the respondent made his submission before the Ld. CIT(A), and the Ld. CIT(A) allowed the ground of appeal of the respondent and deleted the addition. Submission: 1. Section 68 of the Act not applicable on Trade Liabilities: a) In the present case, the Ld. AO” made an addition of Rs.48,38,433/- solely on account of increase in outstanding liabilities during the current year vis-a-viz preceding year. Accordingly, the Ld. AO called upon the respondent to furnish documentary evidence substantiating the increase in such outstanding liabilities. Apart from this, the Ld. AO has not stated any reason or justification for invoking Section 68 of the Act in the instant case. Printed from counselvise.com 22 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh b) In light of the above facts and the basis adopted for invoking Section 68 of the Act, it becomes necessary to determine whether the Ld. AO was justified in treating the outstanding liabilities reflected in the balance sheet as ‘cash credit’ under Section 68. For this purpose, it is first relevant to refer to the relevant extract of Section 68 of the Act, which reads as under:: “Cash credits. 68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year: c) A plain reading of the above provision indicates that the legislature has employed the expression “any sum is found credited” in Section 68. The question, therefore, arises whether ‘trade payablesor outstanding liability’ can be brought within the ambit of this expression. This issue was examined by the Special Bench of the Tribunal in Manoj Agarwal v/s DCIT, [2008] 113 ITD 377 (Delhi), wherein it was observed as under:- “178. …..The argument that section 68 is not applicable where an asset is sold and the sale proceeds are credited in the books of account cannot be accepted having regard to the settled legal position that it is always for the assessee to explain the nature and source of the sums credited in his books of account. The section does not recognize any distinction between amounts credited in the books as gifts or loans or pure receipts, on the one hand, and amounts credited as sale proceeds. In either case, when called upon, the assessee is bound to explain the nature and source of the amounts credited. There may be a few exceptions to this general rule. For example, in the case of credit purchases, the account of the supplier is credited with the amount payable. In such a case, where the purchase is allowed as expenditure, it may not be possible for the Assessing Officer to again call upon the assessee to prove the nature and source of the credit, for the reason that the purchase itself was allowed as expenditure only on being satisfied that it was a genuine purchase on credit. Implicitly, the nature and source of the amount credited has also to be taken as having been explained satisfactorily. Another possible argument can be that in such a case, the amount credited is not a cash credit in the sense that some monies have been received by the assessee, but the credit represents a mere liability payable by the assessee in future. Under accounting principles, a liability can only be brought into account by making a credit entry in the books of account in favour of the person to whom the money is payable. Thus, there is marked difference between a credit representing a liability payable by the assessee and a credit representing monies received from another person. It is because of this distinction, a liability for purchase which has been credited in the account of the supplier cannot be added under section 68 of the Act, more so when the purchase has been accepted as genuine and a deduction therefor has been allowed. In all other cases including the case of a credit representing the sale proceeds of an asset, the provisions of section 68 are applicable and it is for the assessee to prove satisfactorily the nature and source of the monies. ….” (Emphasis supplied) Printed from counselvise.com 23 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh d) In the instant case, the Ld. AO has neither recorded any finding that the liability of Rs. 48,38,433/- represent any cash credit received by the respondedduring the year nor pointed out why and how Rs. 48,38,433/- comes under the jurisdiction of Section 68 of the Act. In fact, the Ld. AO has not recorded any finding to the effect that the amount of Rs. 48,38,433/- is non-genuine or doubtful in nature e) Further, the Ld. AO did not point out any deficiency/ mistake in the books of account maintained by the respondent in regular course of business and also not doubted the method of accounting employed regularly. Further, he has not rejected the books of accounts of the respondent rather accepted the sales, purchases and expenses reported by the respondent in the books of accounts maintained for the year under consideration. f) Therefore, it is evident that the Ld. AO has made addition towards trade liability purely on suspicion and surmises without bringing on record anything as to how such amount constitute an unexplained cash credit in the hands of respondent which can be taxed u/s. 68 of the Act. g) Hence, in view of the above submission, it is an unchallenged fact that the addition represents trade liabilities which was due to be paid by the respondent. Hence, the observation of the Ld. AO is totally misplaced since Section 68 deals with cash credit in the books of the assessee however, in the current case, there is no cash credit rather, the Ld. AO was dealing with liabilities of the respondent. Accordingly, the addition of Rs. 48,38,433/- is unwarranted and deserves to be deleted. h) In support of our above contention, we rely on the following judgements:  Hon'ble Delhi High Court in the case of CIT Vs. Anurag Agarwal reported in (2010) 2 DTLONLINE 134 (DEL) IN ITA NO. 325/2008 vide order dt 22.07.2009 held as under: \"As there was no case for disallowance for corresponding purchases no addition could be made under section 68 in as much as it is not in dispute that the creditors outstanding related to purchases and the trading results were accepted by the AO. We are, therefore, of the opinion that no substantial question of law arises for consideration in this case. The appeal is accordingly dismissed.\"  M/S Hind Globe Links Vs ITO, Ward 28(4), New Delhi in ITA No. 4904/Del/2014 and held as under: \"….in the instant case, the AO accepted the trading results and explanation for fall in GP rate furnished by the assessee, so there was no reason for doubting the outstanding balance in the name of the sundry creditors when the purchases made from them were duly accepted as genuine. In our opinion, the Id CIT(A) was not justified in confirming the addition made by the AO.\" In Printed from counselvise.com 24 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh para 21 at page No 68 of the order the coordinate bench further observed \"In our opinion the said addition was not justified because the provisions of section 68 of the Act relates to \"cash credit\", however the amount in question was on account of outstanding balance of the creditors and the purchases from these creditors has been accepted by the AO.\"  Hon'ble Delhi High Court in the case of CIT us. Ritu Anurag Agarwal reported as 2009 (7) TMI 1247wherein the Hon’ble High Court held as under: \"This finding of AO remained undisturbed before the CIT(A) as well and has been accepted by the ITAT. Proceeding on this basis, the ITAT observed that the soles, purchases as well as gross profits as disclosed by the assessee have been accepted by the Assessing Officer. Once this is accepted, we are of the opinion that the approach of the ITAT was correct inasmuch as the Assessing Officer did not consider this aspect while making additions of sundry creditors under Section 68 of the Income Tax Act. As there was no case for disallowance for corresponding purchase, no addition could be made under Section 68 inasmuch as it is not in dispute that the creditors outstanding related to purchases and the trading results were accepted by the AO. We are, therefore, of the opinion that no substantial question of law arises for consideration in this case. The appeal is accordingly dismissed. \"  Hon'ble Allahabad High Court in the case of CIT -vs.- Pancham Das Jain (205 CTR 444) wherein it was held as under: “6. We have heard Sri Shambhoo Chopra, learned standing counsel for the revenue. 7. He submitted that as the respondent-assessee was unable to produce the alleged creditors the provisions of section 68 of the Act was squarely attracted in the present case and the assessing authority has rightly added the two amounts at the hands of the respondent-assessee. According to him section 68 of the Act also covers up the case of purchases made on credit. 8. The submission is misconceived. The Tribunal has recorded a categorical finding of fact based on appreciation of materials and evidence on record that the Assessing Officer had accepted the purchases, sales as also the trading result disclosed by the respondent-assessee. It had recorded a finding that the aforesaid two accounts represented the purchases made by the assessee on credit and, therefore, the provisions of section 68 of the Act could not be attracted in the present case. We fully agree with the view taken by the Tribunal on this issue, inasmuch as, on the bo.sis of the findings recorded by it that these two amounts represented purchases made by the respondent-assessee on credit and the purchases and sales having been accepted by the department, the question of addition of the aforesaid two amounts under section 68 of the Act did not arise inasmuch as the provisions of section 68 of the Act would not be attracted on the purchases made on credit. 9. We, accordingly, answer the question referred to us in affirmative, i,e., in favour of the assessee and against the revenue. There will be no order as to costs.”  Hon'ble Punjab High Court in the case of PCIT Vs Sh. Kulwinder Singh 2017 (7) TMI 957 wherein the Hon’ble Court held as under: “4. A perusal of the order passed by the Tribunal shows that the assessee had shown numerous sundry creditors along with details in his balance sheet. The assessee being a road Contractor Printed from counselvise.com 25 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh received material for the construction of the road. The amounts in question represented purchases made on credits. According to Section 68 of the Act, where any sum is found credited in the books of account of an assessee maintained for any previous year and the assessee offers no explanation about the nature and source of the same or the explanation offered by him is not satisfactory in the opinion of the Assessing Officer, the sum so credited may be charged to income tax as the income of the assessee of that previous year. It has been categorically recorded by the Tribunal that the provisions of Section 68 of the Act u)ere clearly not attracted to the amount representing purchases made on credits. Further the trade creditors in the earlier gears i.e. assessment years 2007-08 and 2008-09 stood accepted in scrutiny assessments. Thus, the genuineness of expenses under consideration could not be doubted. The relevant findings recorded by the Tribunal in this regard read thus:- …” 2. As far as the ground that the Ld. CIT(A) has accepted the additional evidence, without providing the opportunity to the AO to verify the same and submit his report on additional evidence, of the appellant is concerned, it is humbly submitted as under: a) At the outset, please note that the appellant has not submitted any additional evidence before the Ld. CIT(A) which were new to the proceedings rather the so-called evidential evidence were either already filed/available before the Ld. AO during assessment proceedings or was clarificatory in nature. For instance, particularly for this ground under consideration, the appellant submitted his FORM 26AS which was already available before the Ld. AO. b) Further, without prejudice to anything stated above and without any admission, it is a well settled law that the power of the CIT(A) is very wide and is co-terminus with the power of AO. Hence, he can do what an AO can do. Accordingly, although the current case is not a case where altogether new evidences have been submitted by the respondent, even otherwise also, no adverse view against the respondent can be taken under the current case since the Ld. CIT(A) power is co-terminus with the power of AO. The respondent prays for justice. 7. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessee has submitted the copy of the ledger account, bank statement. The entries were duly Printed from counselvise.com 26 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh recorded in the books of account and the same were supported by bills and vouchers. Those books of account were not rejected by pointing out any single defects. The ld. CIT(A) has considered all the aspect of the matter as discussed in the written submission and in the order passed by him. As regards the unsecured loans the assessee filed the confirmation account, PAN number of the depositors. As is evident from the chart given in page 2 of the assessment order that the assessee was not given sufficient time to respond to the show cause notice. As is evident from the finding so recorded at para 5.4 wherein the ld. AO confirmed that he has seen on the data bas and verified the PAN. Our of the various unsecured loan, ld. AO himself appreciated the facts and not made the addition in respect of the various other depositor having same set of information and therefore, rejecting the part is without any basis. There was not additional evidence before the ld. CIT(A), ITR were already available as confirmed by the ld. AO at para 5.4. It is also fact that all the loan depositor were repaid. Based on these argument ld. AR of the assessee supported the order of the ld. CIT(A). 8. We have heard the rival contentions and perused the material placed on record. In this appeal revenue has taken four separate grounds of appeal and we will take up those ground one by one. Before we deal with Printed from counselvise.com 27 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh those ground the fact is that the assessee is engaged in business of managing and operating several toll plazas. The case of the assessee was selected under CASS primarily to verify the business expenditure. Vide ground no. 1 the revenue challenges the finding of the ld. CIT(A) while directing to delete the addition of Rs. 10,81,635/- made by the AO on account of disallowance of Toll Equipment expenditure as the genuineness of expenditure was not established and the expenditure cannot be treated as of revenue nature. Record reveals that the assessee has claimed an expenditure of Rs. 10,81,635/- under head Toll Equipment, whereas the same was disallowed under the head toll equipment stating that such expenditure is capital in nature. The assessee has submitted that toll equipment expenditure is mostly on account of toll receipt printing machines, automated barriers, processing systems, camera equipment etc. and the useful life of such equipment is less than one year due to the nature of the business of the assessee. The assessee has further submitted that such expenditure does not create any asset, and such toll equipment expenditure constitutes only 0.097% of the total revenue and has been incurred through banking channels. Not only that the Toll equipment expenses being charged to revenue expenditure are incurred on various toll equipments utilized in the day to-day running of various toll plazas. These Printed from counselvise.com 28 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh equipment are mostly toll receipt printing machines, automated barriers, processing systems, computer systems, display monitors, scanners, camera equipment, etc. which are subjected to wear and tear due to constant rough usage throughout their lifetime. The expenses of Rs. 10,81,635/- was incurred for the upkeep and smooth functioning of this toll equipment placed at various toll plazas of the assessee and the same are highly used 24*7 and 365 day in year. As is also evident that by the replacement of these no new assets were created through such expenses nor any enduring benefit has accrued to the assessee by way of incurring such expenditure and therefore, such expenditure is to be treated as revenue expenditure only. Record also reveals that the toll equipment expenditure has been incurred on replacement of existing machines/ parts thereof since such machines/ parts thereof needed frequent replacement and these expenses are incurred on routine basis. Therefore, expenditure incurred thereon would certainly fall under revenue expenditure hence, they had been appropriately classified as revenue expenditure. Considering the overall facts and nature of business undertaken by the assessee the repairs and / or replacement is inevitable and therefore, because it was only 0.097 % of the total receipt of the assessee which is normal in this line of business and we do not find any infirmity in the finding so recorded in the Printed from counselvise.com 29 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh order of the ld. CIT(A) and thereby the ground no. 1 raised by revenue devoid of merits. Ground no. 2 the revenue challenges the finding of the ld. CIT(A) in directing to delete the addition of Rs. 61,36,307/- made by the AO on account of Toll expenses as the assessee was bound to furnish the proper accounting along with supporting documentary evidence to claim the expenditure. We note from the record that these expenses under consideration are of a petty and miscellaneous nature incurred in the ordinary course of business. For instance, it was incurred for refreshments, managing operational devices, performing small diagnostics and repairs, providing immediate assistance to the staff, cleaning and housekeeping expenses, upkeep of the Toll Plazas and Booths, Maintenance of the premises, upkeep of flora etc. Due to their small denominations and diverse nature, these expenses have been grouped together for accounting convenience, which is a common and accepted practice in such operational environments. We also note that the total amount of such expenses accounts for only 0.557% of the total receipts of the assessee for the relevant period and looking to the nature of the business and the expenditure incurred to the extent is normal in the line where the assessee operates which is 24*7 and 365 days in year and therefore, considering the Printed from counselvise.com 30 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh overall facts and the details placed on record which are paid by normal banking channels and duly supported by bills and vouchers and entries passed in the regular books of accounts of the assessee. This fact is undisputed and has been explicitly acknowledged by the Ld. CIT(A) in his order. The banking channel payments substantiate the genuineness of the transactions and eliminate any suspicion of unaccounted or fictitious cash expenditure. As such, these transactions are part of the normal business course and are appropriately recorded in the books of accounts. The bench also noted from the record that the case of the assessee was also selected for scrutiny for A.Y. 2022-23 and the AO himself has disallowed only 1% of toll expenses incurred by the assessee during the said year. However, under the current case, the Ld. AO disallowed the entire toll expenses without assigning any justification for this deviation even though there is neither any change in facts nor change in law from the A.Y. 2022-23. Therefore, rule of consistency should be followed where the facts are identical and therefore, the ld. CIT(A) sustained that much addition @ 1 % and therefore, we see no infirmity in the finding so recorded by the ld. CIT(A) and therefore, the ground no. 2 of the revenue has no merit and thereby the same is dismissed. Printed from counselvise.com 31 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh Vide ground no. 3 of the revenue the action of the ld. CIT(A) is under challenge wherein the revenue contend that the ld. CIT(A) was not correct in directing to delete the addition of Rs. 1,71,70,816/- made by the AO on account of unexplained cash credit u/s 68 of the I.T. Act as the creditworthiness of the lenders to extend such huge loans remains unsubstantiated looking to the total income declared in the ITRs and the lender's credence for having not enough funds at disposal of the lender to extend the loan. As is evident from the record that while assessment proceedings, the Ld. AO, vide show cause notice dated 14.02.2025, called upon the assessee to furnish documentary evidence to establish the creditworthiness of the lenders / depositors. In response, the assessee submitted a comprehensive compilation containing, inter alia, the names, PAN details, and confirmation letters from the respective lenders. This information is also tabulated by the ld. AO at page 12 of the assessment order. It is not case where the assessee has accepted this loan in cash the same are accepted by an account payee cheque. As is evident from the table wherein the ld. AO noted that the assessee has submitted confirmations and PAN number and the ld. AO verified the fact that the those PAN numbers were active but some of them have not filed the ITR this shows that identity was not in Printed from counselvise.com 32 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh doubt. As regards the ‘Genuineness’ of the loan transactions, we note from the record that the entire loan amounts were repaid by the assessee in the same or immediately succeeding financial year, and that too through proper banking channels. This factual aspect has neither been disputed by the department nor questioned in any manner and has, in fact, been duly acknowledged by the Ld. CIT(A) in his appellate order. Hence, when the loan transactions have been repaid in full via banking routes, there remains no scope for doubting their genuineness. This view support in a decision of co-ordinate bench of Jaipur in the case of ITO Vs. Kedia Builders and Colonizers P. Ltd. Thus the requirement of section 68 of the Act i.e., identity of the creditors, their creditworthiness, and the genuineness of the transactions is proved. We also note that ld. CIT(A) at para 6.4 (pages 27– 28) of the appellate order, categorically recorded a finding that the assessee has furnished sufficient documentary evidence to discharge the onus u/s 68 of the Act. When the assessee furnished confirmation the ld. AO should have exercised power as vested in section 133(6) of the Act and seek direct verification, to his satisfaction, from the lenders. However, no such step was taken during the assessment. Thus, when the assessee repaid those loans no addition under Section 68 can be made as held by Hon’ble Gujarat High Court in case of Rohini Builders [2002] 256 ITR 360 Printed from counselvise.com 33 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh (Gujarat), wherein the court held that \"The genuineness of the transaction is proved by the fact that the payment to the assessee as well as repayment of the loan by the assessee to the depositors is made by account payee cheques and the interest is also paid by the assessee to the creditors by account payee cheques.\". Thus, based on the above discussion and considering the factual aspect as discussed herein above we see no merits in ground no. 3 raised by the revenue and thereby the same is dismissed. The last and 4th Ground as raised by the revenue wherein the revenue challenges the action of the ld. CIT(A) in directing to delete the addition of Rs. 48,38,133/-made by the AO on account of Sundry Creditors ignoring the fact that the assessee has failed to furnish the details of the creditors along with ledgers, confirmations & supporting documents to prove their identity, nature of liability. Also, the CIT (A) accepted additional evidence without providing opportunity to the AO to verify the same and submitted his report on additional evidence. As is evident from the record that the assessee reported Rs. 10,09,60,423/- under ‘Current Liabilities & Provisions’ in its Balance Sheet furnished for the year under consideration. While assessment proceeding ld. AO noticed such outstanding liabilities and asked the assessee to furnish details of the creditors along with ledgers with confirmations & supporting documents to prove their identity, nature of Printed from counselvise.com 34 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh liability. Ld. AO, vide notice dated 14.02.2025, proposed to add increment of Rs. 48,38,433/- in sundry Creditors from Rs. 9,61,21,990/- in A.Y. 2022- 23 to 10,09,60,423/- in A.Y. 2023-24. The break up of the same as submitted is as under : S. No. Particulars Amount 1. NHAI 8,13,21,165 2. RSRDC 1,91,94,077 3. Salary Payable 2,22,400 4. Sundry Expenses Payable 1,28,817 5. Total (A) 10,08,66,459 6. PF Payable 34,964 7. Pramod Lahoty& Company (Audit Fees) 59,000 8. Total (B) 93,964 9. Grand Total (A+B) 10,09,60,423 As is evident from the above chart that the major amount reaming outstanding amount (approximately 99.65%) relates to the NHAI and RSRDC and only 0.35% (Rs. 3,51,217) relates to salary payable and sundry expenses payable and the same was also paid off in the month of April, 2025. Thus, we see no reasons as to why the ld. AO did not convinced with the explanation furnished by the assessee. The ld. CIT(A) after considering the overall facts of the case rightly directed to the ld. AO to delete the addition of Rs. 48,38,133/-on account of sundry creditors. When the assessee carried over the liability and the same is not covered by section 43B of the Act we see no reason as to why the same can be sustained when the assessee acknowledges that the creditor remains as Printed from counselvise.com 35 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh payable and there is no justifiable reasons in invoking the provision of section 68 of the Act in the instant case. A plain reading of the provision of section 68 of the Act indicates that the legislature has employed the expression “any sum is found credited” in Section 68. The question, therefore, arises whether ‘trade payablesor outstanding liability’ can be brought within the ambit of this expression. This issue was examined by the Special Bench of the Tribunal in Manoj Agarwal v/s DCIT, [2008] 113 ITD 377 (Delhi), wherein it was observed as under:- “178. …..The argument that section 68 is not applicable where an asset is sold and the sale proceeds are credited in the books of account cannot be accepted having regard to the settled legal position that it is always for the assessee to explain the nature and source of the sums credited in his books of account. The section does not recognize any distinction between amounts credited in the books as gifts or loans or pure receipts, on the one hand, and amounts credited as sale proceeds. In either case, when called upon, the assessee is bound to explain the nature and source of the amounts credited. There may be a few exceptions to this general rule. For example, in the case of credit purchases, the account of the supplier is credited with the amount payable. In such a case, where the purchase is allowed as expenditure, it may not be possible for the Assessing Officer to again call upon the assessee to prove the nature and source of the credit, for the reason that the purchase itself was allowed as expenditure only on being satisfied that it was a genuine purchase on credit. Implicitly, the nature and source of the amount credited has also to be taken as having been explained satisfactorily. Another possible argument can be that in such a case, the amount credited is not a cash credit in the sense that some monies have been received by the assessee, but the credit represents a mere liability payable by the assessee in future. Under accounting principles, a liability can only be brought into account by making a credit entry in the books of account in favour of the person to whom the money is payable. Thus, there is marked difference between a credit representing a liability payable by the assessee and a credit representing monies received from another person. It is because of this distinction, a liability for purchase which has been credited in the account of the supplier cannot be added under section 68 of the Act, more so when the purchase has been accepted as genuine and a deduction therefor has been allowed. In all other cases including the case of a credit representing the sale Printed from counselvise.com 36 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh proceeds of an asset, the provisions of section 68 are applicable and it is for the assessee to prove satisfactorily the nature and source of the monies. ….” (Emphasis supplied) Thus, as is evident from the record that the ld. AO has neither recorded any finding that the liability of Rs. 48,38,433/- represent any cash credit received by the responded during the year nor pointed out as to why and how Rs. 48,38,433/- comes under the ambit of provision of Section 68 of the Act. In fact, the Ld. AO has not recorded any finding to the effect that the amount of Rs. 48,38,433/- is non-genuine or doubtful in nature. Not only that no mistake as such found while recording the liability in regular course of business and also not doubted the method of accounting employed regularly. Further, he has not rejected the books of accounts of the assessee rather accepted the sales, purchases and expenses reported by the assessee in the books of accounts maintained for the year under consideration. Thus, the action of the ld. AO while making the addition towards trade liability purely on suspicion and surmises without bringing on record anything as to how such amount constitute an unexplained cash credit in the hands of the assessee which can be taxed u/s. 68 of the Act and hence the same was rightly directed to be deleted by the ld. CIT(A). As regards the ground that the Ld. CIT(A) has accepted the additional evidence, without providing the opportunity to the AO to verify the same Printed from counselvise.com 37 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh and submit his report on additional evidence, of the appellant is concerned, we note that the power of the CIT(A) is very wide and is co-terminus with the power of AO. Hence, he can do what an AO can do. Accordingly, although the current case is not a case where altogether new evidences have been submitted by the assessee and even otherwise also, no adverse view against the assessee can be taken under the current case since the Ld. CIT(A) power is co-terminus with the power of AO wherein the ld. CIT(A) has considered the overall material available on record and considered the contention of the assessee and therefore, we see no infirmity in the finding so recorded by the ld. CIT(A) and thereby ground no. 4 raised by the revenue stands dismissed. In the result, the appeal of the revenue is dismissed. Order pronounced in the open court on 19/11/2025. Sd/- Sd/- ¼Mk0 ,l- lhrky{eh½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:-19/11/2025 *Ganesh Kumar, Sr. PS vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- DCIT, Circle-02, Kota 2. izR;FkhZ@ The Respondent- Rishiraj Singh, Jhalawar 3. vk;djvk;qDr@ Theld CIT Printed from counselvise.com 38 ITA No. 1073/JP/2025 DCIT vs. Rishiraj Singh 4. vk;djvk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZQkbZy@ Guard File (ITA No. 1073/JP/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar Printed from counselvise.com "