ITAT Deletes ₹2.38 Crore Section 68 Addition, Upholds PF/ESI Disallowance

Rekha Corporation Private Limited Vs DCIT (ITAT Hyderabad)

SEO Title: ITAT Deletes ₹2.38 Crore Section 68 Addition, Upholds PF/ESI Disallowance

SEO Description: ITAT deletes ₹2.38 crore Section 68 addition for unsecured loans but upholds ₹1,00,268 PF/ESI disallowance.

Summary: The assessee company, engaged in the business of trading in pesticides, filed its return for AY 2013-14 declaring income of Rs.1,49,466/-. In assessment proceedings, the Assessing Officer disallowed Rs.1,00,268/- towards employees’ contribution to Provident Fund and ESI under Section 36(1)(va), holding that the payments were made beyond the due dates prescribed under the respective welfare enactments. The AO also made an addition of Rs.2,38,48,000/- under Section 68 in respect of unsecured loans received from various individuals and corporate entities, principally relying upon comparatively low returned income of certain lenders, cash deposits preceding payments through banking channels and non-furnishing of some documents. The CIT(A) substantially upheld both additions.

On appeal, the Tribunal examined the Section 68 addition with reference to the documentary evidence furnished by the assessee, including confirmations, PAN details, income-tax particulars, bank statements and ledger accounts. It found that the identity of the lenders was substantially established, the loans were received through banking channels, and several lender accounts reflected continuing receipts and repayments. The Tribunal held that low returned income, cash deposits in lenders’ accounts or deficiencies in documentation could justify further inquiry but, in the absence of such investigation, could not by themselves sustain the addition. It observed that the AO had not adequately used the powers under Sections 131 and 133(6) or otherwise investigated the source of deposits and had proceeded substantially on suspicion and presumptions. Following the principles discussed in CIT v. Orissa Corporation (P.) Ltd., Nemi Chand Kothari v. CIT, Deputy CIT v. Rohini Builders and Gaurav Triyugi Singh v. ITO, the Tribunal held that the assessee had discharged the initial burden under Section 68 and the Revenue had failed to dislodge the evidence through proper inquiry. It therefore deleted the addition of Rs.2,38,48,000/- and allowed Grounds Nos. 5 to 8.

As regards the employees’ PF/ESI contribution, the Tribunal followed the Supreme Court ruling in Checkmate Services Pvt. Ltd. v. CIT-1 and held that employees’ contribution deposited after the due dates prescribed under the respective welfare enactments is not allowable merely because it was deposited before the due date for filing the return under Section 139(1). The Rs.1,00,268/- disallowance was accordingly upheld, and Grounds Nos. 2 to 4 were dismissed. General Grounds Nos. 1 and 9 were also dismissed as not pressed. Consequently, the assessee’s appeal was partly allowed. The order was pronounced in the open court on 21 August 2026. :contentReference[oaicite:0]{index=0}

List of Cases Discussed / Relied Upon

• CIT v. Orissa Corporation (P.) Ltd.,(1986) 159 ITR 78 (SC) — held that where primary particulars of creditors are furnished and the Revenue does not pursue necessary inquiry, the burden may shift to the Revenue.
• Nemi Chand Kothari v. CIT,(2003) 264 ITR 254 (Gauhati) — considered the assessee’s burden regarding identity, genuineness and financial capacity of creditors and the source of the creditor’s funds.
• Deputy CIT v. Rohini Builders,(2002) 256 ITR 360 (Guj.) — relied upon regarding confirmations, banking-channel transactions, creditor identity and the significance of subsequent repayment.
• Gaurav Triyugi Singh v. ITO,(2020) 121 taxmann.com 86 (Bom.) — considered the requirement to establish identity, genuineness and creditworthiness and the issue of explaining the source of the source.
• A. Govindarajulu Mudaliar v. CIT,(1958) 34 ITR 807 (SC) — considered the principle that an unsatisfactory explanation regarding a cash credit may justify treatment as income under Section 68.
• Hindusthan Tea Trading Co. Ltd. v. CIT,(2003) 263 ITR 289 (Cal.) — considered the assessee’s obligation to establish identity, genuineness and creditworthiness of creditors.
• CIT v. Nova Promoters and Finlease (P.) Ltd.,(2012) 342 ITR 169 (Delhi) — distinguished as a case involving substantial investigative material concerning accommodation entry providers.
• CIT v. N.R. Portfolio (P.) Ltd.,(2014) 42 taxmann.com 339 (Delhi) — distinguished on its facts concerning accommodation entries and investigative material.
• Blowell Auto (P.) Ltd. v. Assistant CIT,ITA No.430 of 2007, dated 27/03/2008 — distinguished on the basis of the different factual foundation of that case.
• N. Tarika Property Investment (P.) Ltd. v. CIT / CIT v. N. Tarika Property Investment (P.) Ltd.,(2014) 221 Taxman 14 (Delhi); SLP dismissed in (2014) 51 taxmann.com 387 (SC) — considered regarding the application of precedent according to its factual foundation.
• CIT v. Kamdhenu Steel & Alloys Ltd.,(2012) 361 ITR 220 (Delhi) — relied upon regarding the impermissibility of remand merely to enable the Revenue to fill deficiencies in an inquiry that should have been undertaken during assessment.
• Checkmate Services Pvt. Ltd. v. CIT-1,(2022) 448 ITR 518 (SC) — followed on the allowability of employees’ PF/ESI contribution deposited after the statutory due dates but before the Section 139(1) return-filing due date.

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Hyderabad ITAT Deletes ₹2.38 Crore Section 68 Loan Addition: Low Income or Prior Cash Deposits in Lenders’ Accounts Cannot Substitute for Revenue’s Investigation

In Rekha Corporation Pvt. Ltd. v. DCIT, ITA No. 1272/Hyd/2025 (AY 2013-14), order dated 21.08.2026, the Hyderabad ITAT considered, inter alia, an addition of ₹2,38,48,000 under Section 68 in respect of unsecured loans. The AO doubted the lenders’ creditworthiness mainly because some lenders had low returned income, certain bank accounts contained cash deposits before issue of cheques, and in some cases all documents sought were allegedly not furnished.

The Tribunal reiterated that the assessee’s initial burden under Section 68 is to establish identity of the creditor, genuineness of the transaction and creditworthiness. Once primary evidence establishing these ingredients is produced, the onus shifts to the Revenue to rebut that evidence through proper investigation.

The ITAT held that where the lenders were identifiable, transactions were supported by confirmations and banking records, and the assessee had furnished prima facie material regarding their financial capacity, the mere fact that the lenders had modest taxable income or had deposited cash in their own bank accounts before advancing loans could justify further inquiry, but could not automatically establish that the loans represented the assessee’s undisclosed income. If the AO doubted the lenders’ source of funds, he ought to have investigated the lenders rather than drawing an adverse inference against the assessee.

The Tribunal ultimately found that the assessee had discharged its initial burden, whereas the Revenue had failed to rebut the documentary evidence. It emphatically observed that “mere disbelief or suspicion cannot take the place of evidence.” Accordingly, the entire ₹2.38 crore addition under Section 68 was deleted.

However, the assessee did not succeed regarding the ₹1,00,268 employees’ contribution to PF/ESI deposited after the statutory due dates. Following the Supreme Court ruling in Checkmate Services Pvt. Ltd., the ITAT held that payment before the Section 139(1) return-filing due date does not cure the delay where employees’ contributions were deposited beyond the due dates under the respective welfare laws. The disallowance was therefore upheld.

Thus, the appeal was partly allowed – ₹2.38 crore Section 68 addition deleted, while ₹1 lakh delayed employees’ PF/ESI contribution disallowance was sustained

FULL TEXT OF THE ORDER OF ITAT HYDERABAD

The assessee company has assailed the impugned order on the following grounds of appeal before us:

“1. The order of the CIT (A) passed u/s 250 of the Act dated 08-07-2025 is erroneous both on facts and in law to the extent the order is prejudicial to the interests of the appellant.

2. The Ld. CIT(A) erred in disallowing Rs. 1,00,268/- in respect of Provident fund and ESI which was duly paid by the assessee before the due date for filing the return of income under section 139 of the Act.

3. The Ld. CIT (A) ought to have considered that all payments in relation to PF/ESI payment were made within the time limits prescribed in the Act.

4. The Ld. CIT(A) erred in making the additions not considering section 36(1)(va) r.w.s 43B of the Act, the expenditure is allowable if paid within due date of filing of return.

5. The Ld. CIT(A) erred in upholding the addition of Rs. 2,38,48,000/- u/s 68 as unsecured loans.

6. The Ld. CIT(A) failed to consider the details submitted by the assessee regarding addition of Rs. 2,38,48,000/- u/s 68 of the Act.

7. The Ld. CIT(A) erred in considering the fact that the assessee furnished required details i.e PAN, ITR returns along with confirmation letters etc.

8. The Ld. CIT (A) ought to have considered that the assessee proved the identity, genuineness & Creditworthiness of the transaction entered as unsecured loans for Rs. 2,38,48,000/-.

9. The appellant may add or alter or amend or modify or substitute or delete and/ or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal.”

2. Succinctly stated, the assessee company, which is engaged in the business of trading in pesticides, had filed its return of income for the AY 2013-14 on 30.09.2013, declaring an income of Rs.1,49,466/-. Subsequently, the case of the Assisted Scrutiny Selection (CASS) and notices under sections 143(2) and 142(1) of the Act were issued.

3. During the course of assessment proceedings, the AO observed that the assessee company had remitted employees’ contribution towards Provident Fund and Employees State Insurance amounting to Rs.1,00,268/- beyond the “due dates” prescribed under the respective welfare enactments, which, thus, was disallowed by him under Section 36(1)(va) of the Act.

4. The AO further observed that the assessee company had during the subject year received loans from various individuals and corporate entities. The AO, to verify the authenticity of the loan transactions, issued notices under Section 133(6) of the Act to certain lenders and called upon the assessee company to furnish confirmations, income-tax returns, bank statements, and other supporting documents. The AO, after examining the material produced by the assessee company, had certain doubts regarding the creditworthiness of certain lenders for the reasons, viz. (i) that some of the lenders had disclosed comparatively low taxable income in their respective returns of income; (ii) certain credits in the bank accounts of the lenders were preceded by cash deposits; and (iii) that in a few cases all the documents called for were not furnished. Accordingly, the AO, based on his aforesaid observation, held an aggregate amount of Rs. 2,38,48,000/- received by the assessee company from various lenders as unexplained cash under Section 143(3) of the Act, dated 29/03/2016, determined the income of the assessee company at Rs. 2,40,97,734/-.

5. Aggrieved, the assessee company carried the matter in appeal before the CIT(A) but without success. As is discernible from the record, the CIT(A) substantially concurred with the view taken by the AO both in respect of the disallowance under section 36(1)(va) of the Act as well as the addition made under section 68 of the Act.

6. The assessee company, aggrieved with the order of the CIT(A), has carried the matter in appeal before us.

7. We have heard the Ld. Authorized Representatives of both parties, perused the orders of the authorities below and the material available on record, as well as considered the judicial pronouncements pressed into service by them to drive home their respective contentions.

8. Shri P. Murli Mohan, CA, Ld. Authorized Representative (for short, “AR”) for the assessee company, at the threshold of hearing of the appeal submitted that both the authorities below had grossly erred in law and facts of the case in making/sustaining the addition under Section 68 of the Act. Elaborating on his contention, the Ld. AR submitted that the assessee company had discharged the primary onus that was cast upon it by placing on record confirmations from the lenders, Permanent Account Numbers, copies of their income-tax returns, bank submitted that the unsecured loans were not isolated one-time transactions but formed part of running accounts maintained by the respective lenders with the assessee company, wherein there were regular receipts and repayments over a period of time. The Ld. AR submitted that the subsequent repayment of the loans through banking channels duly established the genuineness of the subject loan transactions. The Ld. AR submitted that the AO had proceeded primarily on the premise that some of the lenders had returned modest incomes or that there were cash deposits in their respective bank accounts prior to advancing the loans. It was submitted that neither of the aforesaid circumstances, by themselves, could justify an addition under Section 68 in the absence of any independent inquiry which would reveal that the monies advanced actually belonged to the assessee company. Elaborating further on his contention, the Ld. AR submitted that, despite entertaining doubts regarding the transactions, the AO had neither exercised the powers available with him under Section 131 of the Act to examine the lenders on oath and conduct any inquiry into the nature and source of the cash deposits appearing in the lenders bank accounts; nor made any effort to obtain information from the AOs of the said respective lenders It was, thus, submitted that the AO has made the addition merely on the basis of suspicion and conjectures without carrying out the necessary verifications, which, thereafter had summarily been approved by the CIT(A).

9. Carrying his contention further, the Ld. AR submitted that during the year establish the source of the lenders in the manner suggested by the AO. The Ld. AR submitted that once the identity of the lenders, the genuineness of the transactions, and prima facie material regarding their financial capacity had been placed on record, the burden shifted upon the Revenue to dislodge the claim of the assessee company. It was submitted that the AO, instead of carrying out such inquiries, had merely rejected the explanation furnished by the assessee company on the basis of presumptions regarding the financial capacity of the lenders. The Ld. AR, in support of his aforesaid submissions, had relied upon the judgment of the Hon’ble Supreme Court in CIT v. Orissa Corporation (P.) Ltd. (1986) 159 ITR 78 (SC), the Hon’ble High Court of Gauhati in Nemi Chand Kothari v. CIT (2003) 264 ITR 254 (Gauhati), the Hon’ble High Court of Gujarat in Deputy CIT v. Rohini Builders (2002) 256 ITR 360 (Guj), and the Hon’ble High Court of Bombay in Gaurav Triyugi Singh v. ITO (2020) 121 taxmann.com 86 (Bom.). Elaborating on his contention, the Ld. AR submitted that in the aforesaid judicial pronouncements it was held that once the assessee produces the primary evidence establishing the identity of the creditors and the genuineness of the transactions, the Revenue cannot make an addition merely because the creditors possess comparatively modest financial means or because the AO has suspicion regarding the source from which the creditors themselves obtained the funds.

10. Per contra, Ms Uppaluri Meena, the learned Senior Departmental Representative (for short, “Sr. DR”), strongly supported the orders of the lower establish the lenders’ creditworthiness. The Ld. Sr. DR emphasized that several lenders had disclosed comparatively insignificant income in their respective returns of income, while substantial sums had been advanced to the assessee company during the subject year. It was further submitted by her that the bank accounts of certain lenders revealed cash deposits immediately preceding the issuance of cheques to the assessee company, which raised serious doubts regarding the genuineness of the loan transactions. The Ld. Sr. DR submitted that the burden cast upon the assessee company under Section 68 of the Act could not be held to have been discharged merely based on the confirmations, PAN details or copies of income-tax returns that were filed by the assessee company, specifically when the surrounding circumstances raised serious doubts regarding the real nature of the subject transactions. The Ld. Sr. DR in support of her aforesaid contentions, relied upon the judgments of the Hon’ble Supreme Court in A. Govindarajulu Mudaliar v. CIT (1958) 34 ITR 807 (SC), the Hon’ble High Court of Calcutta in Hindusthan Tea Trading Co. Ltd. v. CIT (2003) 263 ITR 289 (Cal), the Hon’ble High Court of Delhi in CIT v. Nova Promoters and Finlease (P.) Ltd. (2012) 342 ITR 169 (Delhi), CIT v. N.R. Portfolio (P.) Ltd. (2014) 42 taxmann.com 339 (Delhi) and Blowell Auto (P.) Ltd. v. Assistant CIT, ITA No.430 of 2007, to drive home her contention that the assessee company remained under a statutory obligation to satisfactorily establish the identity, creditworthiness and genuineness of every credit appearing in its books of

11. We have given our thoughtful consideration to the contentions advanced by the Ld. Authorized Representatives of both parties in the backdrop of the orders of the authorities below.

12. Before adverting to the facts involved in the present case, we deem it apposite to cull out Section 68 of the Act as was applicable to the Assessment Year 2013-14, as under:

“68. Cash credits. —Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year:

Provided that where the assessee is a company (not being a company in which the public are substantially interested) and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assessee-company shall be deemed to be not satisfactory, unless

— (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and

(b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory:

Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.”

13. As per Section 68 of the Act, as it stood during the previous year relevant to the AY 2013-14, where any sum is found credited in the books of an assessee maintained for any previous year and the assessee either offers no explanation about the nature and source thereof or the explanation offered is not, in the opinion income of the assessee of that previous year. In our view, the provision merely casts an initial burden upon an assessee to offer a satisfactory explanation regarding the “nature” and “source” of the credit, and whether such burden stands discharged necessarily depends upon the facts and circumstances of each case and the nature of evidence produced by the assessee.

14. We find that the contours of the initial burden under Section 68 have been explained by judicial pronouncements over the years, as per which an assessee is required to establish (i) the identity of the creditor, (ii) the genuineness of the transaction, and (iii) the creditworthiness of the creditor. Once the assessee places on record primary evidence capable of establishing these three ingredients, the initial burden stands discharged and the onus shifts to the Revenue to dislodge the evidence by conducting proper investigation.

15. Before looking into the facts of the case, we deem it apposite to look into the landmark judicial pronouncements dealing with the scope and gamut of Section 68 of the Act. We find that the authoritative pronouncement on the subject as had been pressed into service by the Ld. AR is that of the Hon’ble Supreme Court in A. Govindarajulu Mudaliar v. CIT (1958) 34 ITR 807 (SC). In the said order, the Hon’ble Supreme Court held that where the assessee fails to offer any satisfactory explanation regarding the source of a cash credit, the Revenue is entitled to treat the amount as the income of the assessee. Although same does not lay down that the AO may disregard cogent documentary evidence or sustain an addition merely on the basis of suspicion. Rather, the judgment proceeds on the premise that the explanation furnished by the assessee was found to be wholly unsatisfactory. The aforesaid view was further elucidated by the Hon’ble Supreme Court in CIT v. Orissa Corporation (P.) Ltd. (1986) 159 ITR 78 (SC). In the said case, the assessee company had furnished the names and addresses of the creditors. However, the Revenue did not pursue any further inquiry despite being in possession of the relevant particulars. The Hon’ble Apex Court upheld the order of the Tribunal which had deleted the addition. It was observed that once the assessee company had furnished the basic details relating to the creditors, the burden shifted upon the Revenue to pursue the matter further, and the failure on the part of the Revenue to undertake the necessary inquiry could not be converted into a ground for making an addition under section 68 of the Act. We find that the ratio of the said judgment clearly establishes that where the assessee has produced primary evidence and the Revenue chooses not to verify the same by exercising the statutory powers available to it, the addition cannot be sustained merely because the AO has certain doubts regarding the explanation furnished by the assessee. Also, we find that a significant exposition of the law can be traced in the judgment of the Hon’ble High Court of Gauhati in Nemi Chand Kothari v. CIT (2003) 264 ITR 254 (Gauhati). The Hon’ble High Court observed that the burden cast upon the assessee under Section 68 cannot be establishes the identity of the creditor, the genuineness of the transaction and places on record prima facie material indicating the financial capacity of the creditor, he cannot ordinarily be called upon to prove the source from which the creditor himself obtained the money. It was emphasized that Section 68 does not authorize the Revenue to require the assessee to prove facts which are exclusively within the knowledge of a third party, and if the Revenue had certain doubts regarding the source of funds available with the creditor, then it is always open to the Revenue to proceed against the creditor in accordance with law. Accordingly, it was observed that the burden of proving the source of the creditor’s funds cannot, in the ordinary course, be fastened upon the assessee. In our view, the aforesaid principle assumes significance in the present case because a substantial part of the reasoning adopted by the AO proceeds on the premise that the respective lenders had either made cash deposits in their bank accounts shortly before advancing the loans or had disclosed comparatively modest income in their returns of income. In our considered view, the aforesaid doubts of the AO, by themselves, could at best justify a deeper inquiry by the AO, but cannot automatically lead to the conclusion that the credits appearing in the books of the assessee company represented its own undisclosed income. We say so, for the reason that once the identity of the lender was established and the transaction was supported by banking records and confirmations, the AO ought to have undertaken a further investigation before drawing any adverse inference in the

16. We find that a similar view had been reiterated by the Hon’ble High Court of Gujarat in Deputy CIT v. Rohini Builders (2002) 256 ITR 360 (Guj). In the said case, the assessee had though produced confirmations, PAN details, GIR numbers, assessment particulars and evidence showing that the loans were received through account-payee cheques, but the Revenue nevertheless doubted the creditworthiness of the creditors. The Hon’ble High Court rejected the contentions of the Revenue and held that once the identity of the creditors stood established and the transactions were routed through banking channels, the addition under Section 68 could not be sustained merely because the creditors did not possess substantial income or because the AO had certain doubts regarding their financial capacity. It was further observed that the repayment of the loans through account-payee cheques constituted an important circumstance lending credibility to the genuineness of the transactions. It was, thus, observed that the subsequent repayment of the loan through banking channels is a relevant piece of evidence while appreciating the overall genuineness of the loan transactions.

17. We find that the Ld. AR has also drawn our attention to the decision of the Hon’ble High Court of Bombay High Court in Gaurav Triyugi Singh v. ITO (2020) 121 taxmann.com 86 (Bom.), wherein the it was reiterated that once the assessee places on record the primary documentary evidence establishing the identity of the creditor and the genuineness of the transaction, the Revenue cannot reject the explanation without making meaningful enquiries. The Hon’ble High

18. We are of the view that having regard to the aforesaid judicial pronouncements, it becomes evident that, as per the law applicable to the subject year under consideration, the assessee company was required to discharge only the initial burden contemplated under Section 68 of the Act. In our view, once such burden stood discharged by producing primary evidence, the statutory obligation shifted upon the Revenue to examine the correctness of the explanation by carrying out appropriate investigation.

19. Coming back to the facts involved in the present case, we may observe that during the course of hearing considerable emphasis was placed by the Ld. Sr. DR on the source of funds available with the respective creditors. In this regard, it would be apposite to observe that the controversy before us pertains to unsecured loans received during the period relevant to AY 2013-14. At this stage, we may herein observe that the statutory framework applicable to the year under consideration cannot be examined by importing into it obligations flowing from subsequent legislative developments. We say so, for the reason that in the absence of a specific statutory mandate applicable to the transactions in question, the addition cannot be sustained solely because the AO expected the assessee company to establish the ultimate origin of the amount available with the lenders, particularly when the identity of the lenders and the movement of funds through banking channels are not in dispute. Also, we are of a firm conviction that the AO’s view under Section 68 must be founded upon objective material and not on in Section 68 does not confer arbitrary discretion upon the AO, and the same must be based upon proper appreciation of the evidence produced and, where circumstances warrant, upon investigation carried to its logical conclusion. We will mince no words in observing that a mere disbelief or suspicion cannot take the place of evidence.

20. We shall, in the backdrop of our observations regarding the facts involved in the present case and the settled position of law regarding the scope of Section 68 of the Act, examine whether, on the facts of the present case, the AO discharged the corresponding obligation that was cast upon him after the assessee company had produced the primary evidence in support of the impugned credits. Also, we shall examine whether the authorities below were justified in making/sustaining the addition primarily on the basis of low returned income, cash deposits in the lender’s bank accounts and perceived inadequacy of their financial resources without undertaking any further investigation into the transactions.

21. We have thoughtfully and carefully examined the assessment order, the CIT(A) order, the documentary evidence placed in the Assessee’s Paper Book (APB) and the rival submissions advanced before us. We find on a careful reading of the assessment order that the addition of Rs.2,38,48,000/- under Section 68 has substantially been founded on three circumstances, viz, (i) that certain lenders had that in some cases there were cash deposits or credits in the bank accounts of the lenders before the issuance of cheques to the assessee company; and (iii) that according to the AO, some of the lenders had not furnished all the particulars called for by him. In our view, the question that arises for our consideration is whether these circumstances, individually or collectively, are sufficient in law to sustain the addition under section 68.

22. We shall first examine the addition in respect of each of the lenders separately before considering the cumulative effect of the evidence available on record, as under:

(A). Shri G. Surya Chandra Rao: Rs. 27,38,000/-

(i). We find that the assessee company had received an aggregate amount of Rs.27,38,000/- from the aforesaid lender during the subject year. Out of the said amount, the AO has treated Rs.17,51,000/- as unexplained on the ground that corresponding cash deposits were made in the lender’s bank account and that the said lender had disclosed income of only Rs.7,30,840/- in his return of income for the year under consideration.

(ii). We find that the identity of the lender has not been disputed, as he is an identifiable assessee and the transaction has been routed through the banking channel. Also, as is borne out by the record, the assessee company has produced the confirmation, bank statement, and other supporting documents pertaining to cash deposits appearing in the subject bank account, it was incumbent upon him to summon the said lender under Section 131 of the Act and ascertain the source of such deposits. However, we are afraid that no such inquiry has been undertaken by the AO, and the addition has been made merely on the premise that the lender had disclosed comparatively modest income and that cash deposits preceded the issue of cheques. In our view, such reasoning cannot by itself justify an addition under section 68.

(B). Smt. G. Kamalakshi: Rs. 10,00,000/-

(i). We find that the AO has observed that the lender had not filed her return of income and that no capital account was produced. However, the assessment order does not reveal that the AO had independently undertaken any inquiry whatsoever to verify the financial capacity of the aforesaid lender. Also, we find that the AO neither examined the lender nor called for any further explanation from her. In fact, the addition was made solely because the AO considered the evidence inadequate. In our view, once the identity of the lender and the banking transaction were available on record, the AO was expected to pursue the inquiry further before drawing an adverse inference.

(C). Smt. G. Venkata Lakshmi: Rs.20,73,000/-

(i). As is discernible from the record, the AO treated Rs.18,00,000/- as unexplained. The AO had observed that the lender had disclosed income of Rs. addition has again been made solely on the basis of presumptions regarding the lender’s financial capacity. The AO has neither examined the lender nor investigated the source of the deposits reflected in her bank account. In our view, the conclusion that the lender lacked creditworthiness is thus founded upon assumptions rather than evidence.

(D). Smt. G. Sumalatha: Rs.1,59,69,665/-

(i). We find on a perusal of the record that the assessee company during the subject year claimed to have received an amount aggregating to Rs 1,59,69665/- as loan from the above-mentioned lender. The AO has accepted a small portion of the credit and treated Rs.1,51,00,000/- as unexplained, on the ground that the lender had disclosed income of Rs.8,70,900/- and therefore could not have advanced such substantial sums.

(ii). We are unable to approve the reasoning adopted by the AO for treating the amount received from the aforementioned lender as an unexplained cash credit under Section 68 of the Act. In our view, the taxable income disclosed by a person during a particular assessment year cannot be equated with her total financial resources. We find that the AO has not undertaken any investigation into the source of the funds available with the lender, nor has he examined the lender regarding the large credits appearing in her bank account. As the impugned addition has been made/sustained by both the authorities below substantially on them wherein they had, without dislodging the primary onus that was discharged by the assessee company regarding the authenticity of the subject loan transaction, summarily treated the same as an unexplained cash credit under Section 68 of the Act.

(E). M/s. Srivant Properties Pvt. Ltd.: Rs.3,25,000/-

(i). The AO has recharacterized the subject loan transaction as an unexplained cash credit on the ground that copies of the return of income and certain schedules were not produced. (ii). We find that the aforesaid lender is admittedly a corporate entity. The AO has neither recorded any finding that the company is non-existent or that the confirmation furnished by it is false; nor has he chosen to verify the particulars from the Registrar of Companies or from the jurisdictional AO of the lender company. In the backdrop of the aforesaid circumstances, the addition merely on account of non-production of certain documents cannot be sustained.

(F). M/s. Rekha Crop Protection Pvt. Ltd.: Rs.10,20,000/-

(i) We find that the AO has treated the aforesaid amount as unexplained principally because copies of the return of income and schedules were not furnished by the assessee company.

(ii). We have perused the assessment order, which reveals that the lender is a corporate entity and that the transaction was routed through banking channels. The AO has not undertaken any inquiry to establish that the lender company, i.e., a group entity of the assessee company, lacked financial capacity or that the transaction was merely an accommodation entry. In the absence of such investigation, the addition cannot be sustained merely because certain documents were not furnished.

(G). Shri G. Srinivas Naidu: Rs.18,52,000/-

(i). We find that the AO has made the addition on the ground that corresponding cash deposits were noticed in the lender’s bank account and that the lender had disclosed income of Rs.4,33,710/- in his return of income.

(ii). In our view, the AO has proceeded on the assumption that the lender could not have advanced the amount in question. However, no inquiry has been undertaken regarding the source of the cash deposits, nor has the lender been examined by the AO under Section 131 of the Act. We, thus, are of the view that as the impugned addition is based entirely upon suspicion arising from the returned income and the pattern of bank deposits of the lender, the same cannot be sustained.

(H). Shri B. Ravinder Reddy: Rs.10,00,000/-.

(i). We find on a perusal of the record that the AO had observed that only a confirmation letter was furnished and no bank statement or return of income was produced. We are of the view that even assuming that the evidence produced by the assessee company was incomplete, the AO could not have stopped the inquiry the AO to summon him under Section 131 of the Act or to verify the relevant particulars through independent inquiry. Having failed to undertake either course, the AO proceeded to draw an adverse inference solely because the assessee company had not produced further documents. We are of firm conviction that such an approach of the AO does not satisfy the standard of inquiry contemplated under section 68 of the Act.

23. We find that a common aspect emerging from the observations recorded by the AO relating to each of the lenders is that the additions have substantially been founded upon low returned income, cash deposits preceding the issuance of cheques or non-production of some documents. However, in neither case has the AO recorded a finding that the lender denied the transaction, that the confirmation furnished by the lender was false, that the banking transactions were fabricated, or that the monies advanced had actually originated from the assessee company. Also, we find that in none of the cases did the AO invoke the powers vested in him under Section 131 of the Act to examine the lenders or investigate the source of the deposits appearing in their respective bank accounts. We are of the view that the impugned additions made by the AO rest essentially upon presumptions rather than evidence gathered through investigation.

24. We may herein observe that the identity of the lenders has not been seriously disputed by the Revenue. On the contrary, the assessment order itself Section 133(6) of the Act. We find that the assessee company has placed on record confirmations, copies of Permanent Account Numbers, income-tax particulars in respect of most of the lenders, copies of bank statements and ledger accounts maintained in its books of accounts. We further find that the Revenue has nowhere alleged that the lenders are fictitious or non-existent persons. Also, there is no finding that the confirmations produced by the assessee company are fabricated or that the bank accounts relied upon by the assessee company are not genuine. Accordingly, the identity of the lenders substantially stands established.

25. Coming to the genuineness of the loan transactions, we find that the material placed before us shows that the amounts were received through normal banking channels. Also, the Ld. AR has drawn our attention to the lenders’ ledger accounts, which reveal that the impugned credits were not isolated transactions introduced at the end of the accounting year. Rather, the ledger accounts disclose ongoing financial transactions between the assessee company and the lenders, involving receipts and repayments over time. In our view, the existence of such running accounts constitutes a relevant surrounding circumstance supporting the genuineness of the subject loan transactions. We further find that the Revenue has not brought any material on record to demonstrate that these ledger accounts are either manipulated or that the subsequent repayments therein reflected are

26. We further find substance in the Ld. AR’s contention that the AO has proceeded on the premise that as certain lenders had disclosed comparatively modest taxable income, they lacked the financial capacity to advance the impugned loans. In our considered view, the income returned by a lender, though undoubtedly a relevant circumstance, cannot be treated as the sole or determinative test of his creditworthiness. We are of firm conviction that a person’s capacity to advance money cannot always be measured exclusively with reference to the taxable income disclosed in a particular assessment year. We say so, for the reason that a lender may possess accumulated capital, past savings, sale proceeds of assets, borrowings, agricultural receipts, family funds or other financial resources not necessarily reflected in the income returned during the relevant previous year. Therefore, merely because a lender has disclosed comparatively low income, it will not conclusively establish that every loan advanced by such lender is necessarily non-genuine.

27. Apropos the existence of cash deposits or credits in the bank accounts of certain lenders shortly before the issuance of cheques to the assessee company, the same, in our view, could undoubtedly have justified a deeper inquiry by the AO. However, the existence of such deposits cannot automatically lead to the conclusion that the monies belonged to the assessee company. We are of the view that if the AO had doubts regarding the source of the cash deposits appearing in the bank accounts of the lenders, it was incumbent upon him to investigate the deposits, or making appropriate inquiries through their Assessing Officers concerned. However, we find that no such exercise had been undertaken by the AO in the present case.

28. We further find from a perusal of the assessment record that although notices under Section 133(6) of the Act were issued to certain lenders, the inquiry substantially ended there. The AO neither invoked the powers vested in him under Section 131 of the Act to summon the lenders nor examined them on oath. Also, the AO never attempted to call for an explanation regarding the cash deposits appearing in the respective lenders’ bank accounts. We further find that no inquiry appears to have been conducted from the lender’s AOs to ascertain whether the transactions were reflected in their books of account or whether the advances were explained in their respective assessments. In our considered view, once the assessee company had produced the primary documentary evidence in support of the credits, the AO could not have rested the addition merely upon suspicion without carrying the inquiry to its logical conclusion.

29. We find on a perusal of the record that the AO has repeatedly observed that some of the lenders had disclosed comparatively insignificant income and, therefore, lacked the financial capacity to advance the loans. In our view, such reasoning proceeds on an assumption rather than on evidence. The AO has not recorded any finding that the bank accounts of the lenders were fictitious, that the confirmations were false, or that the monies advanced had ultimately flowed back to the lenders from the assessee company itself. We thus are of the view that in the absence of any such material, the inference drawn by the AO remains essentially conjectural and based on presumptions rather than evidence.

30. The AO has also observed that in certain cases the assessee company had not furnished all the documents called for during the assessment proceedings. We are of the view that even assuming that some deficiency remained in the documentation produced before the AO, such deficiency by itself could not justify the addition without examining the evidence that was admittedly available on record. As observed by us hereinabove, the assessment order itself acknowledges that confirmations, bank statements and income-tax particulars had been furnished in respect of several lenders. We are of the view that the bare minimum that was expected on the part of the AO was to examine the evidentiary value of those documents objectively and, if not satisfied, to make further inquiry. However, the AO in the present case sustained the additions merely because not every document desired by him was produced, which view taken by him cannot be sustained, particularly when the material already available to him was sufficient to trigger a meaningful investigation.

31. We find that another material aspect that is discernible from the record is that the subject loans formed part of continuing business transsactions between accounts placed before us disclose regular debit and credit entries extending beyond the relevant previous year. In our view, such running accounts materially distinguish the present case from cases involving isolated accommodation entries introduced solely to explain a particular credit. We are of the view that the existence of ongoing financial dealings, coupled with subsequent repayments through banking channels, constitutes a relevant circumstance that supports the assessee’s explanation and cannot be ignored when appreciating the overall genuineness of the transactions.

32. We further find that none of the lenders has denied advancing the amounts to the assessee company. Before us, there is neither any statement recorded from any lender disowning the transaction nor has the Revenue brought any material on record to show that the confirmations furnished by the lenders were false or that the bank accounts relied upon by the assessee company did not belong to them. We are of the view that in the absence of any such adverse material, the addition rests substantially upon the subjective satisfaction of the AO rather than on objective evidence gathered during investigation.

33. We thus, based on our aforesaid observations are of a firm conviction that as the assessee company had discharged the initial burden cast upon it under Section 68 of the Act by producing primary documentary evidence establishing the identity of the lenders, the movement of funds through banking channels and

Revenue to rebut the evidence so produced by undertaking a proper enquiry. However, we find that the Revenue has failed to place on record any material that would dislodge the primary onus discharged by the assessee company to prove the authenticity of the subject loan transactions. We say so, for the reason that the record before us does not indicate that any such inquiry was carried out in the manner contemplated by law. In our view, the addition appears to have been sustained predominantly on the basis of suspicion arising from the perceived inadequacy of the lender’s financial resources rather than on the basis of any material which would irrefutably evidence that the impugned credits actually represented the undisclosed income of the assessee company.

34. We shall now deal with the judicial precedents relied upon by the learned Sr. DR. In our considered view, none of the said decisions advances the case of the Revenue in the backdrop of the peculiar facts involved in the present appeal.

35. The reliance placed upon the decision of the Hon’ble Supreme Court in A. Govindarajulu Mudaliar v. CIT (1958) 34 ITR 807 (SC) is, in our opinion, misplaced. The said judgment undoubtedly lays down that where an assessee fails to offer a satisfactory explanation regarding a cash credit, the Revenue is entitled to treat the amount as income of the assessee. However, in our view, the decision cannot be understood to mean that an addition under Section 68 can be sustained notwithstanding the production of primary documentary evidence merely because that the aforesaid judgment was rendered on its own facts where the explanation itself was found to be wholly unsatisfactory. However, in the present case before us, as the assessee company has furnished confirmations, bank statements, PAN details and other supporting material, the controversy before us is not whether any explanation was furnished, but whether the explanation so furnished stood effectively rebutted by the Revenue through proper investigation. On the facts of the present case, we find that the Revenue has miserably failed to carry out the bare minimum investigation required on its part.

36. Apropos the decision of the Hon’ble High Court of Calcutta in Hindusthan Tea Trading Co. Ltd. v. CIT (2003) 263 ITR 289 (Cal), the same, in our view, will not carry the case of the Revenue any further. We say so for the reason that the aforesaid decision reiterates the settled proposition that the assessee must establish the identity of the creditor, the genuineness of the transaction and the creditworthiness of the creditor. There can be no dispute with the said proposition. However, the real controversy in the present case is whether the assessee company had discharged its initial burden and whether the Revenue thereafter undertook the inquiry expected of it under law. As already observed hereinabove, the assessee company has produced primary documentary evidence in support of the impugned loans, which the AO did not dislodge on the ground that the evidence so produced is false or fabricated. We, thus, are of the view that

37. We further find that the Ld. Sr. DR has drawn support from the judgment of the Hon’ble High Court of Delhi in CIT v. Nova Promoters and Finlease (P.) Ltd. (2012) 342 ITR 169 (Delhi). We have carefully perused the said judgment and find that, in the said case, the addition arose in the context of share capital received by the assessee company from entities that surfaced during the extensive investigation conducted by the Investigation Wing as accommodation entry providers. Also, there was tangible material demonstrating that the subscriber companies were merely paper entities engaged in providing accommodation entries. We find the decision was based upon the existence of substantial material directly connecting the share applicants with an organized racket of entry operators. Accordingly, it was in those peculiar facts that the Hon’ble High Court held that the mere production of incorporation documents, PAN details and bank statements could not be treated as conclusive evidence in discharge of the onus cast upon the assessee company. However, the facts before us stand on an entirely different footing. The Revenue has not brought on record any material to establish that the subject lenders were accommodation entry operators or that they formed part of any organized network engaged in providing bogus loans. There is no report from the Investigation Wing, no statement from any alleged entry operator, no evidence of circular movement of funds, and no material suggesting that the monies advanced to the assessee company had actually originated from its coffers. We are afraid that in the backdrop of the Promoters (supra) cannot be mechanically extended to every case involving unsecured loans.

38. Coming to the judgment of the Hon’ble High Court of Delhi in CIT v. N.R. Portfolio (P.) Ltd. (2014) 42 taxmann.com 339 (Delhi), we find that the said order was also rendered in the context of accommodation entries where the surrounding circumstances and the investigative material irrefutably evidenced that the share subscribers lacked any real financial existence. It was observed that the genuineness of a transaction has to be judged on the touchstone of surrounding circumstances and human probabilities. However, the facts involved in the present case before us are materially different. The Revenue has not unearthed any evidence to indicate that the lenders were fictitious concerns or that the transactions were sham. Rather, the material placed before us indicates continuing financial dealings between the assessee company and the lenders through regular banking channels.

39. Apropos the decision relied upon by the Revenue in Blowell Auto (P.) Ltd. v. Assistant CIT, ITA No.430 of 2007, dated 27/03/2008, the same was also rendered in the backdrop of the peculiar facts involved in the said case. We find that the observations of the Court were based on an appreciation of the evidence available in that case. Since the factual foundation in the present appeal is materially different, the said decision does not persuade us to uphold the

40. We also find that the AO has placed considerable reliance upon the decision of the Hon’ble High Court of Delhi in CIT v. N. Tarika Property Investment (P.) Ltd. (2014) 221 Taxman 14 (Delhi), wherein the SLP was dismissed in N. Tarika Property Investment (P.) Ltd. v. CIT (2014) 51 taxmann.com 387 (SC). On a careful perusal of the assessment order, we find that almost every addition has been supported by reproducing the ratio of the aforesaid judgment without examining whether the factual foundation necessary for its application exists in the present case. In our view, judicial precedents cannot be applied as if they were statutory provisions divorced from the facts in which they were rendered, as every precedent is an authority only for what it actually decides. In the present case, the AO has not demonstrated any material comparable to that which existed in CIT Vs. N. Tarika Property Investment (P.) Ltd. We are afraid that mere reliance upon the judgment, without first establishing parity of facts, cannot justify the addition.

41. We have given thoughtful consideration and are of the view that the facts of the present case are more or less in parity with those considered by the Hon’ble Supreme Court in CIT v. Orissa Corporation (P.) Ltd. (1986) 159 ITR 78 (SC) and by the Hon’ble High Court of Gauhati in Nemi Chand Kothari v. CIT (2003) 264 ITR 254 (Gauhati). In the present case as well, the assessee company furnished primary documentary evidence, disclosed the identity of the lenders, and produced material evidencing the movement of funds through banking to carry the investigation further instead of drawing adverse inferences solely on the basis of suspicion arising from low returned income or cash deposits in the lender’s bank accounts.

42. We may also observe another significant feature of the present case, i.e., the assessee company has specifically pointed out that the ledger accounts of the respective creditors disclose continuing transactions involving not merely receipts but also repayments over a period of time. In our view, the aforesaid fact has not been controverted by the Revenue by bringing any contrary material on record. In our view, the existence of running accounts is important because it materially distinguishes transactions from isolated accommodation entries introduced merely to explain particular cash credits. Although we are conscious that the repayment itself may not be conclusive, it nevertheless constitutes an important surrounding circumstance that supports the genuineness of the transactions when considered along with the other evidence available on record.

43. We are further unable to persuade ourselves to restore the matter to the file of the AO merely because the investigation conducted during the assessment proceedings was inadequate. We say so for the reason that the powers available under Sections 131 and 133(6) of the Act are intended to enable the AO to effectively investigate doubtful transactions during the course of assessment itself. We are of a firm conviction that in a case where the assessee has produced the statutory powers available to him for carrying the enquiry to its logical end, the appellate proceedings cannot ordinarily be converted into an opportunity for the Revenue to fill up the lacunae in the investigation as such an approach would be contrary to the well-settled principle that an appellate remand should not ordinarily be ordered merely to enable a party to improve upon a case which it failed to establish despite adequate opportunity. Our view is fortified by the judgment of the Hon’ble High Court of Delhi in CIT v. Kamdhenu Steel & Alloys Ltd. (2012) 361 ITR 220 (Delhi). In the said case, the Hon’ble High Court declined to interfere with the order of the Tribunal which had deleted the addition and observed that once adequate opportunity was available during the assessment proceedings, the Revenue could not seek another innings merely to carry out inquiries which ought to have been undertaken at the appropriate stage. Accordingly, the principle emerging from the said judgment is that remand cannot be ordered as a matter of course for enabling the Revenue to fill up deficiencies in the investigation already conducted.

44. Considering the facts of the present case, we are of the view that as the material necessary for examining the genuineness of the loan transactions was available to the AO during the course of the original assessment proceedings, and the AO chose not to examine the lenders under Section 131 of the Act, not to verify the source of the cash deposits, not to obtain information from the AOs of the lenders and not to pursue the enquiry beyond the issuance of notices under Revenue a fresh opportunity to undertake the investigation which it ought to have completed in the first instance.

45. We, thus, having considered the totality of the facts and circumstances of the case in the light of the legal principles discussed hereinabove, are of the considered view that the assessee company had discharged the initial burden cast upon it under Section 68 of the Act by placing on record requisite documentary evidences, viz. confirmations from the respective creditors, Permanent Account Numbers, copies of income-tax returns wherever available, bank statements, ledger accounts maintained in the regular course of business and other supporting documents evidencing the receipt of the loans through normal banking channels. As observed by us hereinabove, the identity of the lenders has not been disputed by the Revenue and the loan transactions have not been shown to be sham or fictitious. Also, the Revenue has not brought on record any material to establish that the money belonging to the assessee company was routed back to its coffers in the guise of the subject loan transactions. In fact, the principal reason assigned by the AO for treating the impugned credits as unexplained is that certain lenders had disclosed comparatively low income in their returns of income, and that, in some cases, there were cash deposits or other credits in their bank accounts before the issuance of cheques to the assessee company. In our considered view, these circumstances could certainly have justified a more in-depth investigation by the AO, but the same, on a standalone basis, could not constitute conclusive evidence assessee company. Once the assessee company had discharged the primary onus cast upon it for proving the authenticity of the subject loan transactions by producing primary evidence, it was incumbent upon the AO to carry the enquiry to its logical conclusion by examining the lenders under Section 131 of the Act, verifying the explanation regarding the cash deposits, obtaining information from the AOs of the said lenders or otherwise collecting cogent material capable of dislodging the evidence produced by the assessee company. However, we are afraid that a perusal of the assessment order reveals that the AO did not undertake such an exercise.

46. We are also of the view that the ledger accounts produced before us disclose continuing financial transactions between the assessee company and several of the lenders involving receipts as well as repayments over a period of time. The Revenue has not disputed the correctness of these ledger accounts nor has it established that the repayments reflected therein are fictitious. As observed by us hereinabove, though repayment of a loan may not by itself be determinative of its genuineness, it nevertheless constitutes a relevant surrounding circumstance which cannot be ignored while appreciating the cumulative effect of the evidence on record. We, thus, in the backdrop of our aforesaid observations read alongwith the documentary evidence filed by the assessee company in the course of the assessment proceedings, viz. confirmations of the lenders, bank statements of the lenders and the absence of any adverse material emanating from the lenders, the that the same considerably fortifies the explanation furnished by the assessee company regarding the genuineness of the loans received from the aforesaid parties.

47. Also, as observed by us hereinabove, we find that the approach adopted by the AO proceeds substantially on presumptions regarding the financial capacity of the lenders rather than on evidence gathered during the assessment proceedings. We are of firm conviction that the law does not authorize an addition under Section 68 merely because the AO entertains suspicion regarding the source from which the lenders themselves obtained the money. We find that during the subject year, i.e., AY 2013-14, the assessee company was required to establish the identity of the lenders, the genuineness of the transactions and prima facie material regarding their financial capacity. As observed by us hereinabove, the material placed before us shows that the assessee company has discharged the initial burden cast upon it to prove the authenticity of the subject loan transactions. Thereafter, the burden shifted upon the Revenue to rebut the evidence so produced, which we are of the view it had miserably failed to discharge as required per the clear mandate of law.

48. We, thus, in view of our aforesaid observations read along with the settled position of law as culled out by us hereinabove, are of the considered view that as the addition of Rs.2,38,48,000/- made by the AO under Section 68 of the Act, the order of the CIT(A) to the said extent and direct the AO delete the same. The Grounds of appeal Nos. 5 to 8 are allowed in terms of our aforesaid observations.

49. We shall now advert to the disallowance of the delayed deposit of the employees’ share of contribution towards Provident Fund and Employees State Insurance amounting to Rs.1,00,268/-. As is discernible from the record, the AO disallowed the aforesaid amount under Section 36(1)(va) of the Act on the ground that the employees’ contribution had been deposited beyond the “due dates” prescribed under the respective labour welfare enactments, though admittedly before the “due date” prescribed for furnishing the return of income under section 139(1) of the Act, which, thereafter had been upheld by the CIT(A).

50. We have given thoughtful consideration and are of the view that the issue involved in the present appeal is no more res integra pursuant to the judgment of the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. Vs. CIT-1 (2022) 448 ITR 518 (SC). The Hon’ble Apex Court had observed that employees’ contribution to PF/ESI is allowable as a deduction under Section 36(1)(va) only if it is deposited by the employer within the due date prescribed under the relevant PF/ESI legislation. It was further observed that if the employees’ contribution is deposited after the due date under the respective welfare legislation, the deduction is not allowable even if the amount is deposited before the due date for filing the return of income under Section 139(1) of the Act. We, thus, respectfully follow the aforesaid judgment and uphold the made by the AO of the delayed deposit of the employee’s share of contribution towards Provident Fund and Employees State Insurance amounting to Rs.1,00,268/-. The Grounds of appeal Nos. 2 to 4 are dismissed.

51. The Grounds of appeal Nos. 1 & 9 being general are dismissed as not pressed.

52. In the result, the appeal of the assessee company is partly allowed in terms of our aforesaid observations.

Order pronounced in the open court on 21 st August, 2026.