Case Law Details
Ahuja and Anand Buildwell Private Limited Vs DCIT (ITAT Delhi)
ITAT Deletes Section 68 Addition on Forfeited Loans Already Offered to Tax – Double Taxation Not Permissible
The Delhi ITAT deleted additions made u/s 68 in the hands of Ahuja and Anand Buildwell Private Limited in respect of unsecured loans received from Bhavishya Invest Serve Pvt. Ltd. and Nandini Tradex Pvt. Ltd. after noting that the assessee had subsequently forfeited the loans and already offered the amounts to tax in AY 2023-24. The assessee demonstrated through its profit and loss account and computation of income for AY 2023-24 that the forfeited loan amounts were included under “other income” and taxes had already been paid thereon. The Tribunal observed that taxing the same amounts again in AY 2020-21, being the year of receipt of loans, would result in impermissible double taxation.
The Bench also accepted the assessee’s contention based on the Supreme Court ruling in CIT vs. Excel Industries Ltd. that the dispute was revenue-neutral since the amounts had already suffered tax in a subsequent year at the same rate of tax. The Tribunal noted that the assessee had incurred losses in AY 2020-21 and filed a NIL return, whereas the forfeited amounts were ultimately taxed in AY 2023-24 when taxable income arose. Referring to the detailed breakup of “forfeited income” placed on record, including the specific amounts relating to Bhavishya Invest Serve Pvt. Ltd. and Nandini Tradex Pvt. Ltd., the ITAT directed deletion of the additions made u/s 68.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is filed by the assessee against the order of Ld. CIT(A)-3, Noida dated 13.08.2025 for the A.Y. 2020-21 in sustaining the additions made u/s.68 of the Act in respect of unsecured loan obtained by the assessee from Bhavishya lnvest Serve Pvt. Ltd. and Nandini Tradex Pvt. Ltd.
2. The Ld. Counsel for the assessee at the outset submits that though the assessee has raised several technical grounds and grounds on merits, the assessee would like to pursue only the grounds on merits of the addition made by the AO i.e. ground Nos. 5 and 6 of grounds of appeal of the assessee.
3. The Ld. Counsel for the assessee submitted that during the assessment year under consideration the assessee had obtained loans of Rs.35,23,010/- from Bhavishya lnvest Serve Pvt. Ltd. and Rs.1,66,02,685/- from Nandini Tradex Pvt. Ltd. It is submitted that the assessee forfeited these loans and offered to tax in the A.Y. 2023-24. Ld. Counsel for the assessee referring to P & L account for the year ended 31.03.2023, submitted that the assessee had shown other income of Rs.22,24,62,543/- which includes forfeited loans by the assessee and this was offered to tax as the assessee has shown profit before tax of Rs.14.39 lacs which figure matches with profit as per P & L account shown by the assessee in its computation filed for the A.Y. 202324. A copy of the computation filed for the A.Y.2023-24 is placed on record. The Ld. Counsel for the assessee, thus, submitted that since the assessee had already forfeited these loans and offered to tax in the A.Y.2023-24, taxing the same amounts during the A.Y.2020-21 amounts to double taxation.
4. Ld. Counsel for the assessee further placing reliance on the decision of the Hon’ble Supreme Court in the case of CIT Vs. Excel Industries (358 ITR 295) submits that since the assessee had already offered the forfeited loans as income of the assessee for the A.Y. 2023-24 the revenue is not deprived of tax as the rate of tax remained same in both the assessment years and is revenue neutral. Therefore, the addition made by the AO for the assessment year under consideration becomes entirely academic.
5. Ld. Counsel for the assessee further submitted that as a matter of fact there was a loss during the A.Y.2020-21 due to which the assessee had filed NIL return and during the assessment year 2023-24 there was taxable income which shown that the Assessee paid the taxes on that amounts during the Assessment Year 2023-24.
6. On the other hand the Ld. DR strongly supported the orders of the authorities below.
7. Heard rival contentions and perused the orders of the authorities below and the materials placed before us. On perusal of the computation of income furnished by the assessee before us for the A.Y. 2023-24 and the statement of profit and loss account for the year dated 31.03.2023, it is observed that the assessee had shown other income of Rs.2224.63 lacs and arrived at the profit before tax of Rs.1439.49 lacs which figure was reflected as income in the computation of income filed by the assessee for the A.Y. 2023-24.
8. The assessee also furnished breakup of other income as on 31.03.2023 and 31.03.2022 as reflected in the P & L account as under :-
9. The assessee also further submitted the break up for forfeited income which is as under :-
10. As is evident from the above the assessee has reflected the forfeited loans as part of other income in its P & L account for the year ended 31.03.2023, therefore, since the assessee had already forfeited these loans and offered to tax during the assessment year 2023-24 the addition made during the assessment year i.e. 2020-2021 that i.e. year of obtaining loans would result in double taxation.
11. In the circumstances we are inclined to delete the addition made for the A.Y. 2020-21 and accordingly we direct the AO to delete the addition made u/s.68 of the Act in respect of loan creditors namely Bhavishya Invest Serve Pvt. Ltd. and Nandini Tradex Private Limited. Ground Nos.5 and 6 of the appeal of the assessee are allowed.
12. Coming to ground Nos. 1 to 4 which are legal grounds raised by the assessee, in view of the submissions made by the Ld. Counsel that assessee would like to pursue only grounds on merits, the legal grounds raised in ground Nos. 1 to 4 are dismissed as not pressed.
13. In the result, the appeal of the assessee is paratly allowed as indicated above.
Order pronounced in the open court on 15.05.2026.
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