"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी पाथ[ सारथी चौधरȣ, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं./ITA No.629/RPR/2025 Ǔनधा[रण वष[ /Assessment Year : 2016-17 Durga Pulses Link Road, Gurunanak Ward, Tah- Palari, Bhatapara- 493 118 (C.G.) PAN: AAHFD9091R .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-1(1), Raipur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : None (Petition filed) Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 02.12.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 02.12.2025 Printed from counselvise.com 2 Durga Pulses Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.629/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, dated 26.08.2025 for the assessment year 2016-17 as per the following grounds of appeal: “1. That, on the facts and in law, the order passed u/s 143(3) dt. 26/12/2018 is illegal and bad in law, as such, the impugned order dt. 26/12/2018 is liable to be quashed. 2. That, on the facts and law, Ld. CIT (A) erred in not appreciating the facts and confirming the addition of Rs.10,00,000.00 made by Ld. AO, and therefore the impugned addition is liable to be deleted. 3. That, the appellant reserves the right to add, alter or delete any ground.” 2. At the time of hearing, none appeared for the assessee. However, an adjournment petition has been filed which is rejected. The matter was heard after recording the submissions of the Ld. Sr. DR and on a careful perusal of the material available on record. 3. Brief facts in this case are that during the course of assessment proceedings, it was noticed that the assessee has procured fresh loan from different parties. The assessee firm was asked to establish during the course of assessment proceedings, the identity, genuineness and creditworthiness of the transactions. The assessee firm had filed copy of ITR, Bank statements and confirmations of the lenders for verification. It Printed from counselvise.com 3 Durga Pulses Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.629/RPR/2025 was observed by the A.O that in some cases cash has been deposited just before the lending of money. Accordingly to verify their creditworthiness, summons u's 151(1) of the Income tax Act, 1961 (for short ‘the Act’) were issued. The lenders attended the office and their statements were recorded on oath except in the case of Smt. Kamlabai Bhushania. 4. Smt Kamla Bai Bhushnia was specifically asked to furnish copy of acknowledgement of ITR, balance sheet and capital account and to explain the source of deposit of Rs.10,00,000/- in her bank account just before the lending of money to the assessee firm. However, Shri. Ashish Bhushania, grandson of the assessee attended in response to the summons issued and has filed a written submission from her alongwith her copy of acknowledgement of ITR for the AY 2016-17, computation of income and bank statement, The other documents viz. balance sheet and capital account has not been filed and neither did the source of cash deposited in the bank account just before the lending of money has been explained. Thus the creditworthiness and genuineness of the said transaction was not established. Thus vide notice u/s. 142(1) dated 22/12/18, the assessee firm was informed about the same and was required to explain as to why the amount of Rs.10,00,000/- received from Smt. Kamlabai Bhusunai in the form of unsecured loan be not added back to the income returned under section 68 of the Income tax Act, 1961. The Printed from counselvise.com 4 Durga Pulses Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.629/RPR/2025 assessee firm was required to offer its explanation in this regard for which compliance was required to be made on or before 23/12/18. The assessee firm had not made any compliance to the said notice and hence it was presumed that the assessee firm has got nothing to say in this regard and has got no objection for the proposed addition. Onus was on the assessee firm to establish the genuineness of transaction and creditworthiness of Smt. Kamlabai Bhusunai, which it miserably failed to do so. Accordingly, the loan of Rs.10,00,000/- received from Smt. Kamlabai Bhusunai was treated as unexplained credit and added back to the income of the assessee firm u/s 68 of the Income tax Act, 1961. Penalty proceedings u/s.271(1)(c) is separately initiated for concealing the particulars of income. 5. The Ld. CIT(Appeals)/NFAC after considering the assessment order and the submissions of the assessee upheld the addition made by the A.O by observing as follows: “5.3. The submitted evidences show that there are cash deposits in the account of creditor of Rs.10,00,000/- immediately preceding the loan advances to the appellant. This raises dissatisfaction towards the explanation as it strengthens the ratio decidendi of AO holding the Impugned loan as unsatisfactory. The creditors' bank accounts also do not show sufficient cash withdrawals to explain the same. These factors further raise dissatisfaction towards the source explained by the appellant and hence it is held that AO has held rightly the impugned credit as income u/s 68. Addition confirmed. Printed from counselvise.com 5 Durga Pulses Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.629/RPR/2025 6. As a result the grounds and appeal are dismissed.” 6. I have considered the material/documents on record, analyzed the facts and circumstances in this case and carefully considered the submissions of the Ld. Sr. DR. In this case, addition has been made in the hands of the assessee on the ground that one of the loan creditor from whom the assessee had obtained loan of Rs.10 lacs, the said money was deposited in the bank account of loan creditor just before lending of the money to the assessee firm and the said lender viz. Smt Kamla Bai Bhushnia had not furnished the balance sheet and the capital account and since the amount of Rs.10 lacs was deposited in her bank account just before lending of the money to the assessee, the said amount was added u/s. 68 of the Act in the hands of the assessee. 7. Now there are two parts with regard to the adjudication of correctness of the said addition. Firstly, the addition has been made since the lender of the money i.e. Smt Kamla Bai Bhushnia in her bank account had deposited an amount of Rs.10 lacs just before giving money to the assessee. The addition if at all was to be made since the nature and source of such deposits remained unexplained, it would be under section 69A of the Act and not Section 68 of the Act in the hands of the said lender. The A.O of the said Smt Kamla Bai Bhushnia should have made such addition but nothing is emanating from the assessment order of the Printed from counselvise.com 6 Durga Pulses Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.629/RPR/2025 assessee whether such additions were made by that A.O as unexplained money in the hands of the lender. That if the said addition has not been made in the hands of the lender/creditor by her A.O, then in effect, there is no dispute regarding credibility of the said amount deposited and therefore, the limb of creditworthiness, genuineness and identity so far as Section 68 is concerned, is in anyway gets satisfied and in this count, therefore, there cannot be any addition u/s. 68 of the Act regarding the assessee. Secondly, the A.O had made the addition u/s.68 of the Act as unexplained cash credit only on the sole ground of Rs.10 lacs being deposited in the bank account of Smt Kamla Bai Bhushnia just before the transaction, and three limbs for making such addition i.e. identity, creditworthiness and genuineness are not forming a part so far as the assessee is concerned. There is no evidence placed on record by the A.O to show that the assessee has failed to establish the three ingredients of Section 68 of the Act before making the addition. Similarly, the Ld. CIT(Appeals)/NFAC has also not brought on record any enquiry in terms with Section 250(4) & (6) of the Act so to justify the sustainability of the said addition u/s. 68 of the Act in the hands of the assessee. In such circumstances, as per above examination the said addition is misplaced, arbitrary and bad in law. There is no nexus of the ingredients enshrined in the said provision of Section 68 to trigger in the case of the assessee. Printed from counselvise.com 7 Durga Pulses Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.629/RPR/2025 8. As examined in any case as has been brought out by the A.O with regard to non-availability of the explanation of such cash deposits in the account of the lender viz. Smt Kamla Bai Bhushnia, but that cannot trigger the addition u/s. 68 of the Act in the hands of the assessee per se without other corroborative evidence as discussed in the foregoing para. It is seen that the A.O had summarily accepted the version of the lenders who had filed the relevant documents before the A.O. The A.O has failed to justify the reasoning for allowance of these amounts and at the same breath in the case of Smt Kamla Bai Bhushnia, since the balance sheet/capital account was not furnished and the money deposited in her bank account just prior to transaction how that can trigger addition u/s. 68 of the Act in the hands of the assessee that is a matter of remote contemplation and reasoning best known to the A.O. The A.O should have at least brought on record evidence regarding whether the addition of Rs.10 lacs was made in the hands of Smt Kamla Bai Bhushnia by her A.O. If that part was complied with and if the evidences were there on record to justify that at the threshold itself such amount deposited in the A/c. of the said creditor/lender were added as unexplained money then in such scenario, it could have triggered the issue of creditworthiness, genuineness thus satisfying ingredients of Section 68 of the Act for making the addition. In absence of any such co-relation and exercise done by the revenue authorities, in my considered view, addition made u/s. 68 Printed from counselvise.com 8 Durga Pulses Vs. ITO, Ward-1(1), Raipur (C.G.) ITA No.629/RPR/2025 of the Act in the hands of the assessee suffers from legal validity. Further, the Ld. CIT(Appeals)/NFAC has summarily upheld such addition without analyzing the trail and factual events on basis of which the A.O had made the addition. 9. As per the above observations, the order of the Ld. CIT(Appeals)/NFAC is set-aside and the A.O is directed to delete the addition made u/s. 68 of the Act from the hands of the assessee. 10. In the result, appeal of the assessee is allowed. Order pronounced in open court on 02nd day of December, 2025. Sd/- (PARTHA SARATHI CHAUDHURY) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर / Raipur; Ǒदनांक / Dated : 02nd December, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, “एक-सदèय” बɅच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur Printed from counselvise.com "