DCIT Vs Vilpaben Pranavbhai Vora (ITAT Mumbai)
ITAT Mumbai: Section 68 Addition Deleted – Mere Suspicion & Third-Party Info Not Enough
In this case, the ITAT Mumbai upheld deletion of ₹5 crore addition u/s 68, holding that general allegations based on third-party search findings cannot substitute concrete evidence against the assessee.
The Tribunal observed that:
- The AO relied heavily on investigation wing reports and search findings in other cases, without bringing any specific incriminating material against the assessee,
- The assessee had furnished complete documentary evidence-confirmations, bank statements, financials, and repayment details,
- The entire transaction (loan for proposed property deal) was through banking channels and fully repaid, and
- The lender had sufficient financial capacity, supported by audited financials.
The ITAT held that:
- Once the assessee proves identity, genuineness, and creditworthiness, the burden shifts to AO,
- Mere tagging of lender as a “shell entity” in other proceedings is not sufficient, and
- No addition can be sustained without direct nexus or independent enquiry.
Accordingly:
- Revenue’s appeal was dismissed,
- Deletion of ₹5 crore was upheld, and
- Legal grounds in cross-objection were kept open
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The present set of proceedings comprises an appeal filed by the Revenue and the cross objection filed by the assessee, arising out of the order dated 30.09.2025 passed by the Commissioner of Income Tax (Appeals)-49, Mumbai [hereinafter referred to as “CIT(A)”]under section 250 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”]for A.Y. 2019-20. The assessment in the present case was framed by the Assessing Officer under section 147 read with section 143(3) of the Act vide order dated 31.03.2024.
