ACIT Vs Lord Shiva Construction Co. Pvt. Ltd. (ITAT Delhi)
The Revenue filed an appeal against the order dated 16.01.2025 passed by the Commissioner of Income Tax (Appeals) in relation to Assessment Year 2018–19, arising from the assessment completed under Section 143(3) read with Section 144B of the Income Tax Act, 1961. The assessee had filed its return declaring total income of ₹1,16,47,586. During scrutiny proceedings, the Assessing Officer made three additions: ₹1,62,00,000 under Section 68 as unexplained loan received from a sister concern, ₹56,66,440 under Section 56(2)(viib) as unexplained share premium, and ₹71,00,000 under Section 68 as unexplained cash deposits.
In appellate proceedings, the Commissioner (Appeals) examined the additions in detail and deleted all of them. With respect to the loan of ₹1.62 crore, the assessee submitted documentary evidence including confirmation from the lender, copies of income tax returns, audited financial statements, and bank statements. The lender also responded to notices issued under Section 133(6), confirming the transaction. Although the Assessing Officer had raised concerns regarding mismatch of entries, relationship between parties, alleged accommodation entries, and cash deposits routed through a newly opened bank account, the Commissioner (Appeals) found that the identity of the lender, its creditworthiness, and the genuineness of the transaction were established through verifiable records. It was also noted that related party disclosures were made in statutory forms without qualification. Accordingly, the addition under Section 68 was deleted.
