DCIT Vs Techno Industries (ITAT Ahmedabad)
The Revenue filed an appeal against the order dated 22.01.2025 passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre, for Assessment Year 2017-18. The assessee, a firm engaged in manufacturing hoists and cranes, had filed its return declaring total income of Rs. 64,27,990/-. The assessment under Section 143(3) determined total income at Rs. 1,93,22,803/- after making additions including unsecured loans under Section 68 (Rs. 1,03,00,000), disallowance of interest (Rs. 1,66,037), and disallowance of employees’ PF contribution (Rs. 3,27,846). The CIT(A) deleted these additions, prompting the Revenue’s appeal.
Addition under Section 68 and Rule 46A
The Assessing Officer treated unsecured loans received from five parties as unexplained cash credits, holding that identity, creditworthiness, and genuineness were not established. The CIT(A), after examining confirmations, PAN details, income-tax returns, bank statements, and evidence of transactions through banking channels with deduction of TDS on interest, concluded that the assessee had discharged the onus under Section 68 and deleted the addition.
Before the Tribunal, the Revenue relied on the assessment order, while the assessee submitted that all evidences were furnished and examined. The Tribunal noted that documentary evidence including confirmations, PAN, ITR acknowledgments, Aadhaar, electricity bills, and bank statements were on record. It observed that the CIT(A) recorded categorical findings that identity was established through PAN and ITRs, creditworthiness through income declarations and bank statements, and genuineness through banking transactions and TDS on interest. No adverse material was brought by the Revenue to controvert these findings. Applying settled law that once identity, creditworthiness, and genuineness are established, addition under Section 68 cannot be sustained, the Tribunal upheld deletion of Rs. 1,03,00,000. Grounds 1 and 2 were dismissed.
