DCIT Vs A P Trading Co. (ITAT Mumbai)
The case concerns an appeal filed by the Revenue and a cross-objection by the assessee against the order dated 24 April 2025 passed by the Commissioner of Income Tax (Appeals) for assessment year 2019–20.
The Revenue challenged the deletion of an addition of ₹12.69 crore made by the Assessing Officer (AO) under section 68, treating unsecured loans as unexplained cash credits. The Revenue contended that the assessee failed to establish the genuineness of the transactions, creditworthiness of the lender, and the source of funds. It also alleged that the transactions involved layering and circular movement of funds among group entities, suggesting accommodation entries.
The assessee, in its cross-objection, challenged the validity of the search and seizure action under section 132 and subsequent proceedings under section 153A, alleging lack of incriminating material and jurisdictional defects. However, at the time of hearing, the assessee chose not to press these grounds, and the cross-objection was dismissed accordingly.
The facts indicate that a search action was conducted on 17 April 2018 on the assessee along with other group entities. The assessee filed its return declaring total income of ₹4,077. During assessment proceedings, the AO made an addition of ₹12.69 crore, treating unsecured loans received from a company as unexplained cash credit under section 68.
