KGY GLASS INDUSTRIES PVT LTD.,SURAT V. .ASSISTANT COMMISSIONER OF INCOME TAX, SURAT

CO 20/SRT/2024

AI Insights

The case involves KGY Industries Pvt. Ltd., which faced scrutiny from the Assistant Commissioner of Income-tax regarding unexplained unsecured loans and share application money for the assessment year 2014-15. The Assessing Officer added these amounts under section 68 of the Income Tax Act, citing lack of creditworthiness and genuineness of the transactions. The assessee appealed to the CIT(A), which led to partial relief by deleting some additions but confirming others. Both parties appealed to the Tribunal, which upheld the CIT(A)'s decision on the repaid loans but confirmed the additions related to certain lenders and share application money.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 107889 (ITAT-SURAT)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Appeal Filed On: 12-08-2024
• Other Referred Cases: CIT vs. Orissa Corporation (P) Ltd., CIT vs. Aayachi Chandrasekhar Narsanghji, PCIT vs. M/s Skylark Build, Rajhans Construction Pvt. Ltd. vs. ACIT, ITO vs. Mega Collection (P.) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RITESH MISHRA
• Assessee Lawyers: KIRAN K SHAH
• Keywords: Set aside; Third party statement; Bogus Share capital; Deemed to accrue or arise in india
• Section: 143(3); 250; 68; 208; 44AD; 69A

Judgement Text

"आयकर अपीलीय अिधकरण,सुरत Ɋायपीठ,सुरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आ.अ.सं./ITA No.391/SRT/2024 (Assessment Year 2014-15) (Physical hearing) Assistant Commissioner of Income-tax, Surat, Room No.108, Aayakar Bhavan, Majura Gate, Surat-395001 Vs KGY Industries Pvt. Ltd., 827, GIDC, Sachin, Surat-394 230 [PAN : AAECK 9046 J] अपीलाथŎ /Appellant ŮȑथŎ /Respondent / Cross-objector C.O. No. 20/Srt/2024 (Arising out of ITA No. 391/Srt/2024) (AY: 2014-15) KGY Industries Pvt. Ltd., 827, GIDC, Sachin, Surat-394 230 [PAN : AAECK 9046 J] Vs. Assistant Commissioner of Income-tax, Surat, Room No.108, Aayakar Bhavan, Majura Gate, Surat-395001. APPELLANT RESPONDEDNT िनधाŊįरती की ओर से /Assessee by Shri Kiran K Shah, CA राजˢ की ओर से /Revenue by Shri Ritesh Mishra–CIT-DR अपील पंजीकरण/Appeals instituted on 08.04.2024 & 12/08/2024 सुनवाई की तारीख/Date of hearing 11.11.2024 उद ्घोषणा की तारीख/Date of pronouncement 09.12.2024 Order under section 254(1) of Income Tax Act PER PAWAN SINGH JUDICIAL MEMBER: 1. This appeal by Revenue and Cross Objection (CO) therein by assessee are directed against order of National Faceless Appeal Centre, Delhi/Commissioner of Income tax (Appeals) [for short to as “NFAC/Ld. CIT(A)] dated 09.02.2024, which in turn arise out of assessment order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 30.12.2016 for assessment year (AY) 2014-15. The Revenue has raised the following grounds of appeal: - ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 2 “1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee in respect of addition made by AO on account of unexplained unsecured loans of Rs.3,46,00,000/- u/s 68 of the Act ignoring the fact that assessee has not proved the creditworthiness of the lenders and also failed to establish the genuineness of transaction of loan along with evidences within the meaning of section 68 of the Act. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has ignored the fact that merely submission of proof w.r.t the identity of the lenders is not enough to discharge the onus casted upon by the assessee u/s 68 of the Act with respect to unsecured loan accepted by the assessee in this case as the assessee has failed to prove the rigors of section 68 of the I.T. Act at the satisfaction of the AO that the lenders have sufficient creditworthiness too. 3. On the facts and circumstances of the case and in law, the Ld.CIT(A) has not justified in deleting the addition made on account of unexplained unsecured loan of Rs.3,46,00,000/- when the assesse-company has accommodated its own money in the guise of the unsecured loan through some other lenders under control of the assessee-company itself.” 2. On service of Memorandum of appeal, the assessee filed its CO raising following grounds; “1) The learned CIT(A) grossly erred in confirming addition on account of share capital for Rs.30 lacs invoking section 68 of the Act as discussed in para 2 of the CIT(A) order. 2) The learned CIT(A) grossly erred in confirming addition on account of cash credits for Rs.1,71,25,000/- invoking section 68 of the Act as discussed in para 6 of the CIT(A) order. 3) The appellant reserves right to add, alter and withdraw of any cross objection.” 3. Brief facts of the case are that assessee is a company engaged in manufacturing of glass and glass bottles. The assessee started its production in the month of January, 2014. The assessee filed its return of income for assessment year 2014-15 declaring loss of Rs.9.59 crores on 17.09.2014. The case was selected for scrutiny. During assessment, Assessing Officer noted that assessee has taken share application and share premium of Rs. 20.00 lakhs form Rihit Agarwal and Rs. 10.000 lakhs from Tulika Agarwal. The assessee was asked to explain the source of such investment by the investor. In response the show ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 3 cause notice, the assessee filed copy of ITR, computation of income and bank statement and took the plea that investment was received through banking channel. The Assessing Officer was not satisfied with the explanation furnished by the assessee and hold that both the investor has no capacity to make such investment. The Assessing Officer made addition of Rs. 30.00 lakhs under section 68 of the Act. 4. The Assessing Officer further noted that the assessee has shown unsecured loan of Rs.5.17 crores during the year from eleven parties. The details of all lenders are recorded in para- 4 at pages 4 to 17 of assessment order. The Assessing Officer asked the assessee to file copy of income-tax return (in short, ‘ITR’), computation of income, balance-sheet and copy of bank statement with confirmations of lenders to justify the source of loan. The Assessing Officer recorded party-wise details in sub-para 1 to 11 of para-4 of assessment order for each lender. The Assessing Officer recorded either income of lenders was very low or has declared low income or lender had received loan or advance from other persons either on the same day or just before some days and given loan to assessee. In some cases, the ITRs filed under section 44AD of the Act as their personal withdrawals were very low. The Assessing Officer recorded his finding in respect of each lender and ultimately held that all the lenders are not creditworthy and have not satisfied the three parameters to prove three conditions i.e., identity of lenders, creditworthiness and genuineness of such transaction. The Assessing Officer added entire unsecured loan of Rs. 5.17 Crore under section 68 of the Act in the assessment order passed under section 143(3) of the Act on 30.12.2016. ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 4 5. Aggrieved by the additions in the assessment order, the assessee preferred appeal before Ld. CIT(A). Before Ld. CIT(A) assessee filed written submissions with copy of ITR, computation of income, bank statement and confirmations of lenders to prove the identity, creditworthiness and genuineness of transaction in respect of all creditors, except in case of Kinjal Textiles, Manoj Silk Mills and Tanishka Fashion, in their cases, assessee filed copy of ITR. The assessee submitted that they have discharged their primary onus by filing ITR. The assessee is not required to explain source of source. On the observation of Assessing Officer about credits in the account of lenders, just before issuing cheque to the assessee, the assessee submitted that no addition under section 68 of the Act is called for, as they are no supposed to prove source of source. The assessee also submitted that substantial loan has been repaid and filed required evidence in the form of their Bank Statement. The assessee also challenged taxing of addition under section 15BBE of the Act, by taking plea that the same is not applicable for assessment year 2014-15, as such amendment was brought in the statute and is applicable with effect from assessment year 2017-18 onwards as per Circular of Central Board of Direct Taxes (CBDT) vide Circular No.3/2017 dated 20.01.2017. Against the addition of share application and share premium, the assessee submitted that both the investor has sufficient capacity to make such investment. The assessee has discharged his onus in providing complete details of the investors. The share application was received through cheque and no investigation was carried out by the Assessing Officer. ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 5 6. The Ld. CIT(A) on considering the submission of assessee noted that main issue raised by assessee is against the addition under section 68 of the Act by making loss is not adjusted. The Ld. CIT(A) by referring the contents of CBDT’s Circular No.3/2017 dated 20.01.2017 and decision of Mumbai Tribunal in the case of M/s Innovative Construction Private Limited Vs ACIT in ITA No.1084/MUM/2019 dated 11.12.2020, ( for AY2013-14), wherein by referring and relying on the decisions of Hon’ble Rajasthan High Court in the case of PCIT Vs Aacharan Enterprises Private Limited (2020) 273 Taxman 85 Raj, held that amendment made by Finance Bill, 2016 in the provisions of section 115BBE providing that no set off or any loss be allowed to assessee against the deemed income under sections 68, 69. 69A to 69D of the Act, could not be applied retrospectively. Thus, following such ratio of decision, the assessee was held eligible for set off loss against the addition under section 68 of the Act. On the merit of addition, Ld. CIT(A) by referring the decision of Surat Bench of Tribunal in case of ITO vs. Mega Collections (P.) Ltd. in ITA No.311/SRT/2022 dated 17.04.2023 assessment year 2013-14, wherein it was held that when assessee has fully discharged primary onus in providing identity of creditors and actual receipt of money and in case, the Assessing Officer is not satisfied about the source of cash deposit in the bank of creditors, the proper course would be to assess such credit in the hands of creditors. The Ld. CIT(A) also referred and relied on the decision of Ahmedabad Tribunal in Aarti Catalyst Solutions Private Limited in ITA No.1195/AHD/2018 dated 16.02.2022 for assessment year 2014-15. The ld CIT(A) prepared a list of creditors in the form of table-1 at page -6 of his order wherein the assessee has repaid the loan amount subsequently and ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 6 deleted the addition to the extent of Rs.3.46 crores, by taking view that the amount of unsecured loan has been returned by assessee prior to 31.03.2023 i.e., before passing order of Ld. CIT(A). And upheld the addition of unsecured loan of Rs.1.71 crore, which is shown in table-2 of his order. The additions of share application and share premium was confirmed by the ld CIT(A) by taking view that the Assessing Officer has given categorical finding just before transfer of share application money cash was deposited in their bank account. 7. Aggrieved by the order of Ld. CIT(A) Revenue has filed present appeal before the Tribunal. On service of appeal memo by Department, assessee has filed C.O. raising ground against the additions of share capital for Rs.30.00 lakh invoking section 68 of the Act and against the action of LD. CIT(A) in confirming the addition of unsecured loan of Rs.1.71 crores under section 68 of the Act. 8. We have heard the submissions of Ld. Commissioner of Income-tax- Departmental Representative (Ld.CIT-DR) for the Revenue and Ld. Authorized Representative (Ld.AR) of the assessee. The Ld. CIT-DR submits that assessee has shown unsecured loan from eleven parties. During assessment, the assessee failed to prove the triple test i.e., identity of depositors / lenders, genuineness transaction of creditworthiness of creditors. All the creditors were showing a meagre income while filing ITR, for certain creditors, the assessee has not furnished any confirmation or statement of account except filing their copy of ITR. The Assessing Officer after detailed discussion had made addition of unsecured loan. The Ld. CIT(A) has not discussed the fact relating to identity, creditworthy and genuineness of transaction and merely relied on various decisions of different Tribunal by ignoring the fact that Assessing Officer has ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 7 categorically proved the fact that out of eleven lenders, eight were not having sufficient means, the loans were given when equal amount was credited in their account. The ld CIT-DR of the revenue prayed to set aside the order of ld CIT(A) and to restore the additions made by Assessing Officer. 9. On the other hand, Ld. AR for the assessee supported the order of Ld. CIT(A). The Ld.AR of the assessee submits that Assessing Officer made addition on unsecured loan received from eleven parties as mentioned in para-4 of the assessment order. The basis for making addition by Assessing Office was that he was not satisfied with the explanation, though such submissions was supported with the evidence like ITR, computation of income, confirmations and bank statement that all the depositors. The Ld. AR of the assessee submits that all the depositors/lenders were filed their ITR and the loans were received through account payee cheque. The assessee furnished complete details of eight creditors consisting of ITR, computation of income, balance-sheet and cross-confirmation to prove the identity, genuineness and creditworthiness of such loan in the following manner; Name of the depositor Amount Rs.000/- Remarks Khushi Impex (Prop. Manoj T.Mishra) 58,00,000 Copy of ITR, computation of income, confirmation, bank statement, balance-sheet, cross confirmation etc., were filed to prove identity, genuineness and creditworthiness Kinjal Textile 52,40,000 -do- Komal Prints 60,00,000 -do- Maa Shakti Prints 36,60,000 -do- Manoj Silk Mills 35,00,000 -do- Ruchika Sarees 30,00,000 -do- Tanishka Fashion 42,00,000 -do- Vewena Prints 32,00,000 -do- Total 3,46,00,000 ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 8 10. Unsecured loans of eight parties were aggregating to Rs.3.46 crores. The assesse, thus, discharged its onus in proving identity, creditworthiness and genuineness of transaction. All such evidences were again filed before the Ld. CIT(A). No cross-enquiry was conducted by Assessing Officer against such lenders. No material is brought on record by Assessing Officer that it was undisclosed income of assessee through loans. The assessee furnished PAN of each of lender. The Ld. AR of the assessee submits that Hon’ble Supreme Court in the case of CIT vs. Orissa Corporation (P) Ltd. 159 ITR 78 (SC) held that when assessee furnished copy of ITR with PAN of lender, no addition is justified unless cross-verification is made by Assessing Officer. The Ld. AR of the assessee submits that majority of loan were paid off/returned by assessee by way of account payee cheque in subsequent year. Therefore, no addition is justified under section 68 of the Act has been held by Hon’ble jurisdictional High Court in the case of CIT vs. Aayachi Chandrasekhar Narsanghji in Tax Appeal No. 992 of 2013. The Ld. AR of the assessee submits that decision of Hon’ble jurisdictional High Court has been followed in a series of decisions by Surat Bench including in case of Rajhans Construction Pvt. Ltd. vs. ACIT in ITA No.1450/Ahd/2016 dated 14.03.2022. The Ld. AR of the assessee submits that Ld. CIT(A) deleted the addition of Rs.3.46 crores after considering the fact that loan to eight parties have been repaid in subsequent year which has not been doubted by the Revenue. The Ld. AR of the assessee submits that he has filed evidence of repayment of eight lenders on record, whose unsecured loans have been repaid subsequently and such details are otherwise recorded by Ld. CIT(A) in table-1 of para-6 of his order. The Ld. CIT-DR has not disputed such ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 9 subsequent payment in his submission. To support his submission, Ld. AR of the assessee relied upon the following decisions:  Associated Transrail Structure Ltd. vs. ACIT (2017) 397 ITR 573 (Guj)  CIT vs. Ranchhodbhai Jivabhai Nakhava (2012) 208 taxman.com 35  DCIT vs. Rohini Builders (2002) 256 ITR 360 (Guj)  CIT vs. Orissa Corporation (P.) Ltd. 159 ITR 78 (SC)  CIT vs. Aayachi Chandrasekhar (992 of 2013) (Guj)  PCIT vs. M/s Skylark Build (616 of 2016) (Bom)  Rajhans Construction (P)Ltd. vs. ACIT (ITA No.1450/Ahd/2016 dated 14.03.2022  ITO vs. Mega Collection (P.) Ltd. ITA No.311/SRT/2022 dated 17.04.2023 11. In support of ground No. 1 raised in his C.O., the Ld. AR of the assessee submits that ground No.1 relates to Rs.30.00 lakh, which the assessee has received as share application money out of which from Rohit Agrawal (Rs.20.00 lakh) and from Tulika Agrawal (Rs.10.00 lakh), the assessee filed copy of ITR, computation of income, bank account, cash book and share application money was received though banking channel. The Assessing Officer as well as Ld. CIT(A) held that they had no sufficient capacity to make investment of Rs.30.00 lakh. The share application money was received through account payee cheque and investors are assessed to tax. No addition is called for unless it is proved that assessee has brought its own fund. 12. In support of Ground No.2 in CO, Ld. AR of the assessee submits that Ld. CIT(A) confirmed the addition against three lenders, namely, D.B. Embroideries (P.) Ltd. Of Rs.27,25,000; Sahil Enterprises of Rs.52.00 lakhs and Rs.92.00 lakhs of Rich Look Fashion aggregating to Rs.1.71 crores. Even to prove the transaction of loan from these three parties, the assessee has filed sufficient ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 10 evidence in the form of contra confirmation, bank accounts and computation of income. Thus, assessee has discharged its primary onus. Once assessee has discharged its primary onus, the burden shifted to Assessing Officer to prove otherwise. The loan of Sahil Enterprises was returned in financial year 2022-23 by cheque. He was having his own capital of Rs.72,58,175/- on 31.03.2024. Thus, his creditworthiness cannot be doubted. The Ld. AR of the assessee submits that out of Rs.52.00 lakh of Sahil Enterprise assessee has returned Rs.13.50 lakh on 24.03.2023 Rs.19.25 lakh on 31.03.2023 and 19.52 lakh on 23.03.2023/- thereby returned his entire loan amount, copy of bank statement is filed on record. 13. On the other hand, Ld. CIT-DR for the Revenue against the ground of C.O. raised by assessee, he supported the order of Assessing Officer. The Assessing Officer has given categorical finding while making such additions. 14. We have considered the submission of both the parties and have gone through the order of lower authorities carefully. We have also deliberated case law relied on Ld.AR of the assessee and Ld. CIT(A). First, we are considering the ground of appeal raised by Revenue. We find that Revenue has raised 3 grounds of appeal, however, substantial ground of appeal relates to deleting the addition of unsecured loan of Rs.3.46 crores. We find that during assessment, Assessing Officer noted that assessee has shown unsecured loan from following eleven parties: S.No. Name of the investor Investment amount (Rs) 1 D.B. Embroideries Pvt. Ltd. 27,25,000/- 2 Khushi Impex 58,00,000/- 3 Kinjal Textile 52,40,000/- 4 Komal Prints 60,00,000/- 5 Maa Shakti Prints 36,60,000/- 6 Manoj Silk Mills 35,00,000/- ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 11 7 Ruchika Sares 30,00,000/- 8 Sahil Enterprise 52,00,000/- 9 Tanishka Fashion 42,00,000/- 10 Veena Prints 32,00,000/- 11 RichLook Fashion 92,00,000/- 15. The Assessing Officer asked the assessee to substantiate the identity, creditworthiness and genuineness of such transaction claimed by assessee. The assessee furnished required details to prove identity, creditworthiness and genuineness of such transaction. We find that Assessing Officer while making addition held that lenders given loan after taking loan from other parties or their income is very meagre or ITR are filed by lenders under section 44AD. The Assessing Officer doubted the creditworthiness of lenders. We find that before Ld. CIT(A) assessee filed detailed written submission. The assessee also took a plea that majority unsecured loans of lenders have been repaid by assessee. The Ld. CIT(A) on the basis of submission of assessee prepared the details of lenders in two tables. One of the table-1 recorded the details of eight lenders consisting of loan amount, document furnished in support identity, creditworthiness and genuineness of such transaction and in middle of the table recorded the date of return/refund of unsecured loan. The Ld. CIT(A) deleted the addition of unsecured loan of eight lenders whose loan amount was repaid subsequently. 16. We find that Hon’ble jurisdictional High Court in case of CIT vs. Ayachi Chandrashekhar Narsangji (2024) 41 taxmann.com 250 (Guj) held that where Department has accepted repayment of loan in subsequent year, no addition was to be made in the current year for such cash deposit. Such, decision has been followed by Surat Bench in a series of decisions including in case of Rajhans Construction Private Ltd. (supra). We find that assessee has placed on ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 12 record copy their bank statement showing the repayment of loan in subsequent year. On cross verification of facts, we find merits in the finding of ld CIT(A). which we affirm. Thus, we do not find any merit in grounds of appeal raised by Revenue. Thus, the grounds of appeal raised by Revenue is dismissed. 17. In the result, the appeal filed by the revenue is dismissed. 18. Now adverting to two grounds raised by assessee in its C.O. Ground No.1 relates to addition of share application money of Rs.30.00 lakh. We find that Assessing Officer made addition of share application and share premium by taking view that assessee has received/share capital of Rs.20.00 lakh from Rohit Agrawal and Rs.10.00 lakh from Tulika Agrawal. The Assessing Officer doubted the creditworthiness of Rohit Agrawal as he was having a meagre income of Rs.2,55,270/-. During relevant assessment year and his household expenses is considered at Rs.15,000/- per month. He has no capacity to make such investment. Further cash deposit made in bank account of 26.08.2013 and on the same day it was transferred through cheque. Thus, creditworthiness of investor is not proved. So far as share application money of Tulika Agrawal is concerned, the Assessing Officer noted that in the ITR, the said investor has shown income of Rs.,62,520/- and Rs.20.00 lakh was deposited in her bank on 12.10.2023 and same amount was transferred through RTGS. Thus, Assessing Officer doubted the creditworthiness of such share application/investors. The Ld. CIT(A) confirmed the action of Assessing Officer by taking view that cash was deposited in the accounts of investor on the same day. Therefore, genuineness and creditworthiness of investor was not proved. Before us, Ld.AR of the assessee simply made submission that amount was received through ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 13 account payee cheque. No further evidence to substantiate either creditworthiness or genuineness of transaction is proved, any meeting of Board of Directors of assessee in accepting or returning assessee share application money or whether any share was allotted or the basis of premium of share premium on the face value of share of Rs. 10.00/-, is filed. Therefore, we do not find any reason to interfere with the order of Ld. CIT(A). Ground No.1 raised in C.O. of assessee is dismissed. 19. Ground No.2 relates to confirming the addition of unsecured loan of Rs.1.71 crores from three parties namely, D.B. Embroideries (P) Ltd. Of Rs.27.25 lakh; Sahil Enterprise of Rs.52.00 lakh and Rich Look Fashion of Rs.92.00 lakhs. The Assessing Officer made addition by taking view that parties were not creditworthiness and has genuineness of transactions are not proved. The Ld. CIT(A) confirmed the action of Assessing Officer. Before us Ld. AR of the assessee vehemently argued that loan of Sahil Enterprise of Rs.52.00 lakh has been repaid on 24.03.2023 and 31.03.2023. The Ld.AR of assessee has furnished copy of bank statement reflecting the repayment. On perusal of bank statement, copy available page-115 of paper book, we find that assessee has repaid Rs.13.50 lakh on 24.03.2023 and Rs.17.25 lakh by way of two separate RTGS for Rs.19.25 lakh each on 31.03.2023. Thus, following the ratio recorded above in respect of other unsecured loan, the assessee has repaid the loan on subsequent year, hence no addition is warrant. So far as other unsecured loan of Rs.27.25 lakh of D.B. Embroideries (P.) Ltd and Rs. 92.00 lakhs of Richlock fashion is concerned we find that assessee failed to prove their creditworthiness neither loan is repaid nor any interest against such unsecured loan is paid nor ITA No.391/SRT/2024 & CO No.20/SRT/2024 ACIT Vs KGY Glass Industries (P)Ltd. 14 any contra/agreement about non-payment of interest is furnished. Thus, ground No.2 raised by assessee in C.O. is partly allowed. 20. In combined result, Revenue’s appeal is dismissed whereas C.O. of assessee is partly allowed. Order pronounced in open Court on 09/12/2024. Sd/- Sd/- (लेखा सद˟/BIJAYANANDA PRUSETH) (Ɋाियक सद˟ PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER सूरत / Surat Dated: 09/12/2024 *Ranjan Sr.P.S* आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to :  अपीलाथŎ/ The Appellant  ŮȑथŎ/ The Respondent  आयकर आयुƅ/ CIT  िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडŊ फाईल/ Guard File By order/आदेश से, // True Copy // सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत "