DCIT Vs R B & Co. (ITAT Surat)
Repaid Loans Pass Muster; Outstanding Ones Face Fresh Test- Section 68 Split Verdict: Two Loans Upheld, Two Sent Back for Fresh Probe
Section 68 Isn’t All-or-Nothing: ITAT Draws the Line- Proof Matters: Two Credits Cleared, Two Reopened
In DCIT vs. R B & Co. (ITA No. 700/SRT/2025, AY 2017-18; order dated 29-12-2025), the Surat Bench of ITAT delivered a mixed ruling on deletion of ₹1,01,49,000 u/s 68. The AO had treated loans from four parties as unexplained. The Ld. CIT(A) deleted the entire addition after admitting additional evidence and obtaining a remand report. The Revenue appealed.
The ITAT upheld deletion in respect of Kevin Godhani (₹11.49 lakh) and Shradda Developer (₹50 lakh), noting that the Assessee had furnished PAN, confirmations, bank statements, and—crucially—the loans were fully repaid, supporting genuineness and creditworthiness.
However, for Manojbhai Vasoya (₹20 lakh) and Narendra Bhimjibhai (₹20 lakh), the Tribunal found gaps: no response to notices u/s 133(6), one creditor being non-traceable/bankrupt, no evidence of interest payment or TDS, and loans still outstanding. Holding that these aspects are material to section 68, the ITAT set aside the matter to the AO to verify interest/TDS, repayment status, and creditworthiness afresh, granting opportunity to the Assessee.
