Neelkhanth Township Pvt. Ltd. Vs DCIT (ITAT Delhi)
Share Capital Addition Deleted Because Revenue Relied Only on Retracted Third-Party Statements; ITAT Rejects Contradictory Approach Where Loan Accepted Genuine but Share Capital Treated as Accommodation Entry; No Addition Under Section 68 Without Evidence of Cash Rotation; ITAT Deletes Share Capital Addition Because Assessee Proved Identity, Creditworthiness, and Genuineness.
The Income Tax Appellate Tribunal (ITAT), Delhi, decided cross appeals filed by the assessee and the Revenue against the order dated 16.09.2025 passed by the Commissioner of Income Tax (Appeals) arising from an assessment completed under Sections 153A and 143(3) of the Income Tax Act for Assessment Year 2017-18.
The Revenue challenged deletion of an addition of Rs.54.50 lakh made under Section 68 in respect of unsecured loans received from M/s Vagmi Financials Pvt. Ltd., alleging that the lender was a paper entity engaged in providing accommodation entries. The assessee, on the other hand, challenged the jurisdiction assumed under Section 153A, the addition of Rs.49.50 lakh towards share capital under Section 68, reliance on third-party statements without cross-examination, and application of Section 115BBE.
The assessee also raised additional legal grounds before the Tribunal contending that the Assessing Officer failed to conduct independent enquiry regarding genuineness of the transactions, relied on statements recorded under Section 131 after the search and not under Section 132(4), denied opportunity for cross-examination, and adopted contradictory reasoning in treating unsecured loans and share capital differently despite both originating from the same entity.
