Income Tax Appellate Tribunal - Delhi
M/S Rise Projects (P) Ltd.,Delhi vs Acit Central Circle-32, Delhi on 18 March, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'G', NEW DELHI
BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER
And
SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER
ITA Nos.5750, 5751 and 5752/Del/2025
Assessment Years: 2018-19, 2019-20 and 2020-21
M/s Rise Projects (P) Ltd. Vs Assistant Commissioner of
195, Basement, Ram Vihar, Income Tax,
Laxmi Nagar, Anand Vihar, Central Circle-32,
East Delhi-110092 Delhi
(APPELLANT) (RESPONDENT)
PAN No.AAFCB3687G
Assessee by Shri Gautam Jain, Advocate
Revenue by Shri Muneesh Rajani, Sr. DR
Date of Hearing 22.01.2026
Date of Pronouncement 18.03.2026
ORDER
PER BENCH:
The above captioned appeals are preferred by the assessee against the orders all dated 30.08.2025, passed by the Learned Commissioner of Income Tax (Appeals)-30, New Delhi (hereinafter referred to as 'ld. CIT(A)), under section 250 of the Income Tax Act, 1961 [hereinafter referred to as, "Act"] for Assessment Years 2018-19, 2019-20 and 2020-21 respectively. The assessment order for AY 2018-19 is passed u/s 143(3) whereas for AY 2019-20 and AY 2020-21 the ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd assessment order are passed by the Assessing Officer [for short, AO] under section 147/143(3) of the Act.ITA No.5751/Del/2025 (AY 2019-20) ITA No.5752/Del/2025 (AY 2020-21)
2. First, we take up the appeals for AY 2019-20 and AY 2020-21. In Assessment Year 2019-20, the assessee has raised jurisdictional ground at Ground no. 1 to 4 challenging the validity of reopening under section 147 of the Act. On merits, ground no.5 relates to the addition of Rs.5.44 Crores made as accommodation entries and held as unexplained cash credit under section 68 of the Act. Ground no.6 relates to the addition of amount of Rs.16 lakhs under section 69A of the Act as unexplained money and ground no.7 relates to the addition of Rs.16.80 lakhs as commission expenditure incurred @3%.
3. In AY 2020-21, Ground no.2 and 3 are jurisdictional ground challenging the validity of reopening under section 147 of the Act. On merits, ground no.4 is on account of addition made of Rs.5,67,00,000/-
as accommodation entries added as unexplained cash credit under section 68 of the Act. Ground no.5 is with regard to addition of Rs.17,01,000/- as commissioner income @3%
4. Briefly, the facts of the case of the assessee emanates from search under section 132 conducted on 17.11.2021 on Galaxy group, Shri Pradeep Indra Prasad Agrawalal and entry provider Shri Deepak Page 2 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd Agrawal and Shri Himanshu Verma. On the basis of the aforesaid search on 17.11.2021, the AO invoked clause (iv) of Explanation 2 to section 148 of the Act, and initiated proceedings u/s 147 of the Act. The CIT(A) upheld the orders of assessment. The following additions representing sums received from the following parties were held as accommodation entry and held as unexplained cash credits u/s 68 of the Act read with section 115BBE of the Act:
Sr Particulars Amount Total
no. AY 2019-20 AY 2020-21
i) ALPS Management 3,59,00,000 --- 3,59,00,000
Solutions (P) Ltd.
ii) LTE Info Technologies (P) 1,85,00,000 20,00,000 2,05,00,000
Ltd
iii) Syamali Security and ---- 5,47,00,000 5,47,00,000
Consultants (P) Ltd.
Total 5,44,00,000 5,67,00,000 11,11,00,000
5. Though the ld counsel has vehemently challenged the validity of assumption of jurisdiction u/s 147 of the Act, he at the outset stated that the additions made of loans from the aforesaid entities, has been accepted by Hon'ble ITAT in ITA Nos 3906 and 3907/D/2023 dated 7.11.2025 DCIT v. Indian Hydro Electric Power (P) Ltd. (pages 386- 460 of Paper Book); ITA No. 2305, 2306, 2038 and 2309 dated 15.10.2025 (Del) Deepak Agarwal v. DCIT. The ld AR extensively quoted the decision of ITAT in ITA Nos 3906 and 3907/D/2023 dated 7.11.2025 DCIT v. Indian Hydro Electric Power (P) Ltd. to bolster his Page 3 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd argument that the aforesaid lenders were examined by the ITAT and were found to be genuine parties.
6. It is the say of the ld AR that the assessee had placed on record evidence in the shape of following and discharged the burden u/s 68 of the Act by establishing identity of the lender, creditworthiness of the lender and genuineness of the transaction.
6.1 With respect to M/s ALPS Management Solutions (P) Ltd, the assessee filed the following:
i) Copy of confirmation from M/s ALPS Management Solutions (P) Ltd. for the period 1.4.2018 to 31.3.2019 (207)
ii) Copy of ledger account of M/s Alps Management Solutions (P) Ltd. in the books of appellant company for the period 1.5.2018 to 31.3.2019 (208-209)
iii) Copy of bank statement of appellant company showing the transaction with M/s Alps Management Solutions (P) Ltd. (210-217)
iv) Copy of audited financial statement in the case of M/s Alps Management Solutions (P) Ltd. as on 31.3.2019 (218-233) 6.2 With respect to M/s LTE Info Technologies (P) Ltd, the assessee filed the following:
i) Copy of confirmation of accounts for the period 1.4.2018 to 31.3.2019 (234)
ii) Copy of ledger account of M/s LTE Info Technologies (P) Ltd. in the books of assessee company for the period 1.4.2018 to 31.3.2019 (235)
iii) Copy of bank statement of appellant company showing the transaction with M/s LTE Info Technologies (P) Ltd.(236-241) 6.3 With respect to M/s Syamali Security & Consultant (P) Ltd, the assessee filed the following:
i) Copy of ledger account of M/s Syamali Security & Consultant (P) Ltd. in the books of appellant company for the period 1.4.2019 to 31.3.2020 (215-217)
ii) Copy of bank statement of appellant company showing the transaction with M/s Syamali Security and Consultants (P) Ltd. (218-227)
iii) Copy of audited financial statement in the case of M/s Syamali Security & Consultant (P) Ltd. for the financial year 2019-20 relevant to assessment year 2020-
21 (228-250) Page 4 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd
iv) Copy of ledger account of M/s Syamali Security & Consultant (P) Ltd. in the books of appellant company for the period 1.4.2013 to 31.3.2025 (251-255)
v) Copy of master data (258)
7. The ld AR submitted that for identity of lenders, the assessee had submitted that:
i) That all lenders are corporate entities registered with Registrar of Companies under Companies Act' 2013
ii) That all the lenders are duly assessed to tax;
iii) That confirmation of lenders except than M/s Syamali Security and Consultants (P) Ltd. and M/s LTE Info Technologies (P) Ltd. for Assessment year 2020-21 has been placed on record; and
iv) That lenders maintain bank accounts and transactions are through banking channels;
For creditworthiness of lenders:
i) That confirmation of lenders except than M/s Syamali Security and Consultants (P) Ltd. and M/s LTE Info Technologies (P) Ltd. for Assessment year 2020-21 has been placed on record; and
ii) That copies of audited financial statement of the lender except M/s LTE Info Technologies (P) Ltd., further establish the creditworthiness of lenders For genuineness of transaction:
i) That confirmation of lenders except than M/s Syamali Security and Consultants (P) Ltd. and M/s LTE Info Technologies (P) Ltd. for Assessment year 2020-21 has been placed on record; and
ii) That repayment of the loan establishes the genuineness of transactions; and
iii) That copies of audited financial statement of the lendor except M/ LTE Info Technologies (P) Ltd. also confirm the genuineness of transactions;
8. The ld AR further submitted that loans taken from these lenders were subsequently repaid as follows:
Page 5 of 25ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd I Alps Management Solutions (P) Ltd.
Assessmen Opening Amount Total Repayment Closing
t year balance received balance
2018-19 - - - - -
2019-20 - 3,59,00,000/ 3,59,00,000/ - 3,59,00,000/
- - -
2020-21 3,59,00,000/ - 3,59,00,000/ - 3,59,00,000/
- - -
2021-22 3,59,00,000/ - 3,59,00,000/ - 3,59,00,000/
- - -
2022-23 3,59,00,000/ - 3,59,00,000/ - 3,59,00,000/
- - -
2023-24 3,59,00,000/ - 3,59,00,000/ - 3,59,00,000/
- - -
2024-25 3,59,00,000/ - 3,59,00,000/ - 3,59,00,000/
- - -
2025-26 3,59,00,000/ - 3,59,00,000/ 3,59,00,000/ -
- - -
II LTE Info Technologies (P) Ltd..
Assessmen Opening Amount Total Repayment Closing
t year balance received balance
2018-19 - - - - -
2019-20 - 1,85,000,00/ 1,85,00,000/ - 1,85,00,000/
- - -
2020-21 1,85,000/- 20,00,000/- 2,05,00,000/ - 2,05,00,000/
- -
2021-22 2,05,00,000/ - 2,05,00,000/ - 2,05,00,000/
- - -
2022-23 2,05,00,000/ - 2,05,00,000/ - 2,05,00,000/
- - -
2023-24 2,05,00,000/ - 2,05,00,000/ - 2,05,00,000/
- - -
2024-25 2,05,00,000/ - 2,05,00,000/ - 2,05,00,000/
- - -
2025-26 2,05,00,000/ - 2,05,00,000/ 2,05,00,000/
- - -
III M/s Syamali Security & Consultant (P) Ltd.
Assessment Opening Amount Total Repayment Closing
year balance received balance
2020-21 - 5,47,00,000/- 5,47,00,000/- - 5,47,00,000/-
2021-22 5,47,00,000/- - 5,47,00,000/- - 5,47,00,000/-
2022-23 5,47,00,000/- - 5,47,00,000/- - 5,47,00,000/-
2023-24 5,47,00,000/- - 5,47,00,000/- - 5,47,00,000/-
2024-25 5,47,00,000/- - 5,47,00,000/- 1,97,00,000/- 3,50,00,000/-
2025-26 3,50,00,000/- - 3,50,00,000/- 3,50,00,000/- -
9. The ld AR stated that the reasons for making additions by the AO is that the loans were obtained from the entities controlled and Page 6 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd managed by Deepak Agarwal and was being used to provide accommodation entry in lieu of cash @ 3%. Further, the AO held that lenders were non-descript companies having no genuine business and have no creditworthiness and thus, the assessee is beneficiary of the accommodation entry. The ld AR countered the arguments of the AO as follows:
i) The ld AO has merely reproduced the ledger account of appellant in the books lender companies. It is submitted that there is nothing adverse in these ledger accounts to allege or hold that these are unexplained cash credits; on the contrary said ledger itself establish that the transactions between appellant and lenders are through banking channel and duly recorded in audited books of accounts of both the companies. Further, the ledger accounts are duly recorded in the audited books of account and cannot be said to be incriminating material as held in various decisions wherein it has been held that the balance sheets, profit and loss account, ITRs and ROC data, Blank share transfer form, power of attorney of investor companies and ledger accounts cannot be termed as incriminating material.
ii) It is submitted that transactions of advances of loans by both the lender companies namely M/s ALPS Management Solutions Pvt. Ltd. and M/s LTE Info Technologies Pvt. Ltd has been accepted by Hon'ble Income Tax Appellate Tribunal, Delhi Benches in decision dated Page 7 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd 07.11.2025 in ITA No. 3906 and 3927 for assessment year 2018-19 and 2019-20 in the case of DCIT v. Indian Hydro Electric Power (P) Ltd.
pages 386-460 of Paper Book for Assessment year 2020-21. It is submitted that once Hon'ble Bench has accepted the identity, genuineness and creditworthiness of both lenders in the year under consideration i.e. assessment year 2019-20; addition made and sustained in the hands of appellant company deserves to be deleted as well.
iii) It is submitted that as far as repayment by M/s Moulik Trading Enterprises Ltd. there is no adverse material referred in the order of assessment; therefore, addition made and sustained is not in accordance with law. It is further submitted that even otherwise repayment has been made through banking channel duly recorded in audited and assessed books of accounts, therefore invocation of provisions of section 69A "Unexplained Money" of the Act is misconceived.
10. Per contra, the ld DR vehemently stated that the lender companies are established dummy entities and were being operated by entry provider Shri Deepak Agrawal and Shri Himanshu Verma. As the lenders were established dummy entities, hence all transactions with them have to be considered as bogus. The Ld DR further stated that as far as creditworthiness of the lenders are concerned, the ld DR relied Page 8 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd on the AO's order where the AO found that the lenders had weak financials.
11. We have heard the rival submissions and perused the materials on record. We find that with respect to transactions of advances of loans by the lender companies namely M/s ALPS Management Solutions Pvt. Ltd. and M/s LTE Info Technologies Pvt. Ltd, the same has been examined and accepted by Hon'ble Income Tax Appellate Tribunal, Delhi Benches in its decision dated 07.11.2025 in ITA No. 3906 and 3927 for assessment year 2018-19 and 2019-20 in the case of DCIT v. Indian Hydro Electric Power (P) Ltd (supra). The Coordinate Bench of ITAT held as follows:
"13 Ld. AR for the assessee also filed a detailed written submission in this regard which is reproduced as under:
...
27 The Respondent-Assessee respectfully submits that the following chart summarizes the documentary evidence furnished during the assessment proceedings to substantiate the identity, creditworthiness of the creditors, and genuineness of the loan transactions:
.....
33. On the merits of the addition of unsecured loans, it is seen that to prove the identity, genuineness and creditworthiness of the Page 9 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd lender companies, the assessee has filed following details before the AO:
To prove the Identity of the Lender companies:
• Copy of Permanent Account Number (PAN) of each lender company; • Certificate of Incorporation issued by the Registrar of Companies; • Memorandum of Association (MoA) and Articles of Association (AoA);
• Company Master Data as available on the Ministry of Corporate Affairs (MCA) portal.
To establish the Genuineness of the Transactions • Bank statements showing the receipt of loan amounts through normal banking channels;
• Signed confirmations of account from each lender; • Details and evidence of repayments, where applicable; • Ledger accounts of lenders maintained in the books of the Respondent;
• Interest payment records with TDS deduction, including Form 26AS and TDS certificates.
To establish Creditworthiness of the Lender companies • Audited financial statements of all the lender companies for the relevant financial years;
• Acknowledged copies of Income Tax Returns of the lender companies;
• Bank statements reflecting adequate balances prior to the transfer of funds.
34. By filing all the relevant details of the loan creditors before the AO as listed above, assessee has discharged the onus lies upon it. Therefore, there is nothing left on the part of the assessee to prove further. If the AO wanted to inquire further, he has powers under the provisions of section 131 and section 133(6) of the Act which he could have opted for and could have verified whatever is submitted before him. The Hon'ble Supreme Court in the case of Orissa Corporation reported in [1986] 159 ITR 78 (SC) has observed that when the assessee furnishes names and addresses of the alleged creditors and the GIR numbers, the burden shifts to the Department to establish the Revenue's case and in order to sustain the addition the Revenue has to pursue the enquiry and to establish the lack of creditworthiness and mere non-compliance of summons issued by the Assessing Officer under section 131, by the alleged creditors will not be sufficient to draw an adverse inference against the assessee. In the present case as observed above, no such exercise was carried out by the AO.
35. The Hon'ble Allahabad High Court in the case of Principal Commissioner of Income-tax v. Anshika Consultants (P.) Ltd. reported in [2024] 162 taxmann.com 792 (Allahabad) held as under:-
....
36. Similarly in the case of Deputy Commissioner of Income-tax v. Paswara Papers Ltd. reported in [2024] 159 taxmann.com 604 (Allahabad), the Hon'ble Court has held as under:
...Page 10 of 25
ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd
37. The Co-ordinate Bench of ITAT Delhi in the case of ITO Vs. Alpha Contech Pvt. Ltd. in ITA No.3351/Del/2016 vide order dt. 28.07.2023 held as under:
....
38. On the issue of discharging the onus, the Hon'ble Delhi High Court in the case of Mod. Creations (P.) Ltd. v. ITO reported in [2013] 354 ITR 282, held as under:
....
39. It was further observed by the Hon'ble Court as under:
....
40. The Hon'ble Delhi High Court in the case of CIT vs. Vrindavan Farms Pvt. Ltd. etc. in ITA. No.71 of 2015 dated 12th August, 2015 held as under :
....
41. The Hon'ble Delhi High Court in the case of PCIT vs. Agson Global Pvt. Ltd reported in [2022]134 Taxmann.com 256 (Delhi) while allowing the appeal in favour of the assessee towards the additions made u/s 68 of the Act has held as under :
....
42. It is further seen that the except one company, M/s SA Sheilds Security Services Pvt. Ltd., all the loans taken from the remaining companies were repaid in subsequent years and relevant copies of the ledger accounts in the year of payment are also placed before us. It is also seen that no adverse inference was drawn by the revenue in the year of payment and thus question of getting accommodation entries in the guise of loan does not survive.
43. The Hon'ble Gujarat High Court in the case of PCIT Vs Ojas Tarmake Pvt Ltd reported in 156 Taxmann.com 75 has observed as under:
...
44. The Hon'ble Jurisdictional High Court in the case of Pr. Commissioner of Income Tax-12, Delhi vs. Jagmag Builders in ITA No. 325/2024 has held as under:
...
45. Another major fact is that the AO has not doubted the expenses claimed by the assessee towards the payment of interest to these loan creditors companies though principal amount of loan is alleged as bogus. Once it is alleged that the principal loan is a bogus accommodation entry how the interest paid on such alleged bogus loans could be allowed as genuine expenditure. In the instant case, the AO has not only allowed the interest payment but also accepted the fact of TDS made on such interest payment as genuine and accepted the loss declared by the assessee after claiming such interest as expenditure. This dual approach is further lead to belief that AO has proceeded with preconceived notion of making addition of the loans as bogus without applying his mind to overall facts of the case and the relevant details submitted by the assessee.
46. In view of the above, in our considered opinion no addition could be made in the order passed u/s 153A of the Act on the basis of retracted statements of third parties and further without any Page 11 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd incriminating material found/seized during the course of search from the possession of the assessee. Further the assessee has duly discharged the onus lied upon it by establishing the identity, creditworthiness of the lenders, and genuineness of the loan transactions through every possible evidence like confirmations of the lender companies, their Financial Statements, their Income tax records such as their ITR's and PAN, bank statements and further evidences of repayment in subsequent years. Ld. CIT(A) after considering these facts had deleted the additions and we find no infirmity in the said order which is hereby upheld on his issue. Accordingly, Grounds of appeal Nos. 1, 3 and 4 raised by the revenue are dismissed.
12. Respectfully following the decision of the Coordinate Bench, and taking into consideration the detailed documents and evidence furnished by the assessee and also coupled with the fact that the said loans were repaid subsequently, we also hold that the assessee has successfully discharged its onus lied upon it by establishing the identity, genuineness of the loan and creditworthiness of the lenders namely M/s ALPS Management Solutions Pvt. Ltd. and M/s LTE Info Technologies Pvt. Ltd.
13. As far as loan from M/s Syamali Security & Consultant (P) Ltd is concerned, we are of the view that the assessee has again discharged its onus by establishing the identity, creditworthiness of the lender, and genuineness of the loan transactions through evidence like confirmations of the lender companies, their Financial Statements, their Income tax records such as their ITR's and PAN, bank statements and further evidences of repayment in subsequent years. We find that the documentary evidences furnished by the assessee has not been Page 12 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd rejected nor the ld AO has made any independent enquiry to rebut the burden discharged by the assessee. In view of the aforesaid, aggregate addition made and sustained of Rs. 11,11,00,000/- (Rs. 5,44,00,000/-
for Assessment year 2019-20 and Rs. 5,67,00,000/- for Assessment year 2020-21) of the loans from M/s ALPS Management Solutions Pvt. Ltd.
and M/s LTE Info Technologies Pvt. Ltd and M/s Syamali Security & Consultant (P) Ltd u/s 68 of the Act, therefore, is hereby directed to be deleted. The grounds are allowed.
14. With respect to grounds 6 to 6.2 for assessment year 2019-20 regarding addition made as unexplained money of Rs. 16,00,000/- u/s 69A of the Act read with section 115BBE of the Act and sustained by the CIT(A), the ld AR submitted that the said sum represented sum received from Moulik Trading Enterprises Ltd. towards repayment of loan.
15. Having heard the rival submissions, we find that admittedly the transaction under consideration is duly recorded in the books of accounts maintained by the assessee and as such section 69A of the Act is not applicable. Moreover, once the receipt of loan and outstanding credit balance has been accepted in preceding assessment years including immediate preceding assessment years i.e. 2017-18 and 2018- 19 u/s 143(3) of the Act, repayment of the same through banking channel could hardly be doubted in the instant assessment year under Page 13 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd consideration u/s 69A of the Act. Further, we find that the assessee has submitted Copy of ledger account of M/s Moulik Trading Enterprises (P) Ltd. in the books of assessee company for the period 1.4.2018 to 31.3.2019 and 1.4.2015 to 31.3.2019; Copy of bank statement of assessee company showing the transaction with M/s Moulik Trading Enterprises (P) Ltd.; Copy of order of assessment dated 25.3.2021 u/s 143(3)/143(3A)/143(3B) of the Act for Assessment year 2018-19; Copy of order of assessment dated 12.12.2019 u/s 143(3) of the Act for Assessment year 2017-18. We find that the onus of the assessee stands discharged whereas revenue has not been able to discharge the burden to show repayment u/s 69A of the Act is bogus.
The addition is accordingly, directed to be deleted. The ground is allowed.
16. Ground 7 is in respect of commission expenditure incurred @ 3% for arranging accommodation entry in the garb of unexplained income by invoking provisions of section 69C of the Act, no longer survives in the wake of decision taken herein above on the said loans. The additions are accordingly directed to be deleted and ground is allowed.
ITA Nos.5750/Del/2025(AY 2018-19)17. The assessee has raised following grounds of appeal in ITA No.5750/Del/2025:-
Page 14 of 25ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd
1. That the learned Commissioner of Income Tax (Appeals)-30, New Delhi has grossly erred both in law and, on facts in upholding the determination of income made by the learned Assistant Commissioner of Income Tax, Central Circle-32, Delhi of the appellant company at Rs.
3,41,56,560/- as declared income at Rs. 1,23,42,830/- in an order of assessment dated 25.3.2021 u/s 143(3) read with section 143(3A) and 143(3B) of the Act.
2. That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in sustaining an addition of Rs. 1,90,00,000/- representing alleged sum received from the following parties as unsecured loans and erroneously held as unexplained cash credits u/s 68 of the:
2.1. That while confirming the above addition, the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the factual substratum of the case, statutory provisions of law and as such, addition so sustained is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable.
2.2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in recording various adverse inferences which are contrary to the facts on record, material placed on record and, are otherwise unsustainable in law and therefore, addition so sustained is absolutely unwarranted.
2.3 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that sum of Rs. 1,90,00,000/-received by the appellant company had been fully substantiated by documentary evidence placed on record in the course of appellate/assessment proceedings and, therefore such sum could not in law or on fact be held to be unexplained cash credit u/s 68 of the Act.
2.4. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that sum of Rs. 1,90,00,000/- had been received through banking channels from independent parties and as such, addition so sustained is not in accordance with law and untenable. 2.5. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that even otherwise on account of lack of enquiry by the learned Assistant Commissioner of Income Tax and as such, addition so sustained is not in accordance with law and untenable.Page 15 of 25
ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd
4. That since the order of assessment dated 25.3.2211 u/s 143(3) read with section 143(3A) & 143(3B) of the Act framed by the learned Additional/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer, National Faceless Assessment Centre, Delhi is without jurisdiction and deserves to be quashed as such. 4.1. That the learned Commissioner of Income Tax (Appeals has failed to appreciate that personal hearing is a mandatory requirement to be satisfied u/s 144B of the Act and non-grant thereof vitiates the assessment and therefore the same is a nullity.
5. That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding the levy of interest of Rs. 1,79,611/-u/s 234A of the Act, interest of Rs. 61,59,234/-u/s 234B of the Act and interest of Rs. 1,65,823l- u/s 234C of the Act which are not leviable on the facts of the appellant.
18. The sole issue involved in the present appeal related to Rs.1,90,00,000/- added as unexplained cash credit under section 68 of the Act
19. Brief facts of the case are that M/s. Rise Projects Pvt. Ltd. has filed return of income declaring total income of Rs.1,23,42,830/- on 31-10-2018. During the assessment proceedings, the AO found that the assessee has received unsecured loans from 9 parties. To verify the genuineness and creditworthiness of loans, the AO issued notice u/s 133(6) where 3 parties did not respond leading to the addition of loans from them being treated as unexplained credit u/s 68 of the Act as follows:.
Sr.No. Particulars Amount (Rs.)
i) NeerajChaudhary 1,05,00,000
ii) M/s Divya Builders & Contractors (P) Ltd. 80,00,000
iii) M/s Network Realty (P) Ltd. 5,00,000
Total 1,90,00,000
Page 16 of 25
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M/s Rise Projects (P) Ltd
20. The ld. AR submitted that the assessee has filed a copy of confirmation of accounts; copy of acknowledgement of return, to establish the identity, genuineness and creditworthiness of the lenders.
With respect to Neeraj Chaudhary, the confirmation could not be procured as the person was in jail for violating cheque bouncing case.
However, the ld. AR stated that loan was returned in FY 2018-19. The ld. AR submitted that Assessing Officer without rejecting the documentary evidences or making independent enquiries held that genuineness of loans were not proved and therefore he made the addition. The ld. AR further submitted that the ld. CIT(A) sustained the addition holding that though the transactions were done through banking channel, their loan do not prove creditworthiness or ruled out accommodation entries.
21. The ld. AR furnished a detailed submissions as follows:
Sr. Observations of the learned Submission of the appellant No. Assessing Officer
i) The assessee has filed reply FACTUALLY INCORRECT AND LEGALLY along with confirmation of 8 MISCONCIEVED parties and in one case, the i) Mr. NeerajChaudhary is a client of the appellant assessee could not collect the and had advanced interest free unsecured loans on confirmation as the party from completion of Faridabad project in December' whom loan was taken, Shri. 2022 his loan was adjusted against allotment of Neeraj Choudhary is in Jail for villas in the project Rise Sky Bungalows, Sector-41, violating the SARFESAI Act Faridabad (Haryana). Mr. NeerajChaudhary also (Bank Defaulter) and Negotiable raised a bank loan from Aditya Birla Housing Instruments Act (Cheque Finance Ltd. (ABHL") for allotment of villas. As a Bouncing). The details filed by result of adjustment, the remaining balance of Rs.
the assessee company along 4.98 crores is still recoverable from Mr. with the documents of the 9 NeerajChaudhary. ABHL has also informed that parties are perused. No housing loan of Mr. NeerajChaudhary has become Page 17 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd confirmation along with his Non Performing Assets ("NPA") and recovery credit worthiness is furnished in proceedings have been initiated under SARFESI and the case of Shri Neeraj under section 138 of Negotiable Instruments Act. Choudhary and only stated that Infact, as stated during the assessment he is in prison in connection proceedings, he has been in judicial custody. with a cheque bouncing case.
Since no proof of credit ii) It is thus submitted that on account of worthiness and genuineness of impossibility of performance, i.e. on account of the aforesaid party with judicial custody of the lendor, the inability of the confirmation are given, the loan appellant to provide for confirmation could not be amount of Rs. 10500000/- paid a ground to draw adverse inference. It is by him during the year is added submitted that it is a matter of record that the as income from other source. lendor is otherwise assessed to tax and has also (para 4(a) of the order) transactions through banking channels. In such circumstances once the amount received has been offered for taxation as sales in financial year 2022- 23 and there is lack of enquiry by the learned Assessing Officer to discredit or disbelieve the explanation, the addition is not in accordance with law.
iii) It is submitted that, the Latin Maxim "lex non cogit ad impossibilia" also expressed as "impotentiaexcusatlegem", means that the law does not compel a person to do that which he cannot possibly perform. This maxim has been accepted by Hon'ble Supreme Court in the case of Krishnaswamy S. PD. And Another vs. Union of India and Others reported in 281 ITR 305 (SC).
iv) Reliance is placed on the judgment of Apex Court in the case of M/s Om Gurusai Construction Company v. M/s V.N. Reddy &Ors reported in 2023 (8) JT 346 (SC) wherein the Hon'ble Court has held in paras 19 to 24 as under:
"19. That no one can be compelled to perform an impossible task - Lex non cogitadimpossibilia - is a well-accepted legal principle.
20. This Court in Raj Kumar Dey and Others v. TarapadaDey and Others [JT 1987 (3) SC 555 :
1987 (4) SCC 398], while quoting, approving and applying the maxim to the facts of that case, had the following to say:
"6. ... The other maxim is lex non cogitadimpossibilia (Broom's Legal Maxims - page
162) - The law does not compel a man to do that which he cannot possibly perform. The law itself and the administration of it, said Sir W. Scott, with reference to an alleged infraction of the revenue laws, must yield to that to which Page 18 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd everything must bend, to necessity; the law, in its most positive and peremptory injunctions, is understood to disclaim, as it does in its general aphorisms, all intention of compelling impossibilities, and the administration of laws must adopt that general exception in the consideration of all particular cases."
21. Applying the same maxim and highlighting its principle, this Court in HUDA and Another v. Dr. BabeswarKanhar and Another [2005 (1) SCC 191] stated that every consideration of justice and expediency would require that the accepted principle which underlies Section 10 of the General Clauses Act should be applied in cases where it does not otherwise in terms apply [Para 5].
22. Closer to the facts of the present case is the judgment in Rosali V. v. TAICO Bank and Others [2009 (17) SCC 690]. In that case, an auction was held after 4.00 p.m. when the banks were closed. Order XXI Rule 84 of the Code of Civil Procedure mandates that "on every sale of immovable property the person declared to be the purchaser shall pay immediately after such declaration a deposit of twenty-five per cent on the amount of his purchase-money to the officer or other person conducting the sale, and in default of such deposit, the property shall forthwith be re- sold". In Rosali (supra), the 25% bid amount under Order XXI Rule 84 of the CPC was directed to be paid the next day and it was so paid. While accepting it as a valid deposit, this Court quoted the following paragraph from the judgment of the Karnataka High Court in Dakshayani v. Branch Manager, Indian Overseas Bank [AIR 1998 Kant 114]:
"4. On that basis if we interpret the law though there is no power in the Court to extend the time fixed by the statute still the expression immediately is capable of taking within its sweep a situation where an act is impossible of performance on the day on which the auction is held as it happened in Savithramma case [ILR 1973 Kant 1277] when the bank itself was on strike and no deposit could have been made in the bank or in the event the auction-sale is held after court hours, a receipt order in that regard cannot be obtained for deposit of such an amount. Such amount could be deposited only after obtaining a receipt order. If next day also Page 19 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd happens to be a holiday, the day immediately thereafter coming up which is a working day will be the day on which such act will have to be performed. If any other interpretation is given it would stultify the very object of law."
23. In view of the above, we have no hesitation to hold that the deposit of the additional performance security on 17.03.2021 was in due compliance of Clause 2.22.0 (ix) of the tender conditions. There was no breach of that clause.
24. Decision making authorities, like the tendering authority here, could not have turned a blind eye to undisputed ground realities and compelling necessities, like the one that presented itself here. After all, they do not live in ivory towers."
v) The appellant hastens to add here that as per the order of assessment, there was an opening balance of Rs. 10,10,32,956/- and payment during the year of Rs. 83,13,602/- and loan received was Rs.1,05,00,000/- and there was closing balance of Rs. 10,32,19,354/-. In such circumstances once opening balance is accepted and repayment of Rs. 83,16,602/- is accepted, the addition is otherwise based on contradictory assumptions and presumptions and therefore not tenable.
ii) In the case of M/s. Divya IRRELEVANT CONSIDERATION AND LEGALLY Builders and Contractors Pvt MISCONCEIVED Ltd., confirmation of loan of Rs. i) It is submitted that during the course of 8000000/- is furnished by the assessment proceedings the appellant has filed assessee along with return of income dated 11.9.2017 alongwith acknowledgement copy of AY computation of income alongwith audited financial 2017-18 acknowledgement copy statement for the financial year 2017-18 relevant of AY 2018-19 already to assessment year 2018-19 (pages furnished) along with Profit and 92-99 of Paper Book) loss account and Balance sheet.
However, schedule 9 of the ii) It is also submitted that appellant company has Balance sheet wherein short filed confirmation (page 91 of Paper Book) to term loans and advances on establish the genuineness of transaction asset side did not show the name of M/s. Rise Properties iii) The appellant further submits that, no Pvt Ltd. The total amount of summons had been issued to bankers of the lender, short term loan is and, also no verification has been done of the Rs. 1,67,23,300/- (Advance for income tax records of the lendor; and thus on this property Rs. ground alone, addition is not tenable. 1,15,85,000/- , Capriso Finance Ltd. Rs. 7,00,000/- , iv) Furthermore the loan of Rs. 80,00,000/- is SiriInfinlease Pvt. Ltd. explained from the source in the shape of share 19,38,300/- and capital of Rs. 29,94,000/- and reserves and surplus Page 20 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd RishabhBuildwell Pvt. Ltd Rs. of Rs. 1,28,62,525/- (page 94 of Paper Book) and 25,00,000/-). Hence, the therefore no adverse inference could be validly genuineness of the loan given by drawn.
the M/s Divya Builders and Contractor Pvt. Ltd is not v) The observation of the learned Assessing Officer proved and added as income that "assets side did not show the name of Rise from other source. (para 4(b) of Properties (P) Ltd.: is misconceived in view of the the order) confirmation placed at page 91 of Paper Book and repayment during the financial year 2021-22 relevant to assessment year 2022-23 as tabulated above in para 7 of this submission. In any case once advance for property of Rs. 1,15,85,000/- has been reflected in the balance sheet under the head Short Term Loans & Advances - Note 9 (page 98 of Paper Book); and,that too without any enquiry that loan is not reflected in the financial statement of creditor and, that too without any independent enquiry is misplaced, misconceived and not tenable.
iii) In the case of M/s. Network IRRELEVANT CONSIDERATION AND LEGALLY Realty Private Ltd, confirmation MISCONCEIVED of loan of Rs. 500000/- is i) It is submitted that during the course of furnished by the assessee assessment proceedings the appellant has filed alongwith other documents. return of income dated 1.8.2018 alongwith However, the Balance sheet of computation of income alongwith audited financial this company shows the asset of statement for the financial year 2017-18 relevant Rs. 1,70,60,071/- (Current to assessment year 2018-19 (pages 101-115 of Investments Rs. 2,14,429/- , Paper Book) Inventories Rs. 1,59,92.758/- , Cash and cash equivalents Rs. ii) It is also submitted that appellant company has 3,43,583/- , Short term loans filed confirmation (page 100 of Paper Book) to and advances Rs. 4,88,262/- establish the genuineness of transaction and Other current assets Rs.
21,039/-) . On verifying the iii) The appellant further submits that, no balance sheet of M/s Network summons had been issued to bankers of the lender, Realty Pvt. Ltd, the short term and, also no verification has been done of the advances Rs. 488262/- (MAT income tax records of the lendor; and thus on this Credit Rs. 2,34,581/- Income ground alone, addition is not tenable.
tax refund (2017-18) Rs.
2,53,176/- and Income tax iv) Furthermore the loan of Rs. 5,00,000/- is
refund (2018-19) Rs. 505/-). explained from the source in the shape of share
Hence, the genuineness of the capital of Rs. 31,75,000/- and reserves and surplus
loan given by the M/s. Network of Rs. 1,37,47,386/- (page 107 of Paper Book) and
Investments is not proved and is therefore no adverse inference could be alidly added as income from other drawn.
source. (para4(c) of the order of assessment) v) The observation of the learned Assessing Officer that "on verifying the balance sheet of M/s Network Realty (P). Ltd, the short term advances Rs. 4,88,262/- (MAT Credit Rs.
Page 21 of 25ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd 2,34,581/- Income tax refund (2017-18) Rs.
2,53,176/- and Income tax refund (2018-19) Rs. 505/-). Hence, the genuineness of the loan given by the M/s. Network Investments is not proved" is misconceived in view of the confirmation placed at page 100 of Paper Book and repayment during the financial year 2021-22 relevant to assessment year 2022-23 as tabulated above in para 7 of this submission. In any case, once allotment of property of Rs. 1,59,92,758/- has been reflected in the balance sheet under the head Inventories -Note 9 (page 113 of Paper Book) and therefore the assumption that loan is not reflected in the balance sheet of creditor and, that too without any independent enquiry is misplaced, misconceived and not tenable.
22. Per contra, the ld DR strongly relied on the orders of the AO/CIT(A).
23. We have heard the rival submissions and perused the materials on record. We find that with respect to transactions of advances of loans from M/s. Divya Builders and Contractors Pvt Ltd., the AO has added the same only on the ground that the assets side of its balance sheet did not show the name of Rise Properties (P) Ltd. We find that the AO totally ignored the various documents/evidences such as confirmation of the lender to establish the genuineness of transaction as also the fact that repayment of the said loan was made during the financial year 2021-22 relevant to assessment year 2022-23. Furthermore, the AO did not conduct any independent enquiry of the financial statement of creditor with regard to assessee's submission that the same was advance for property of Rs. 1,15,85,000/- which is reflected in the Page 22 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd lender's balance sheet under the head Short Term Loans & Advances.
We are of the considered view that the addition of the said loan has been validly explained and its addition u/s 68 is misconceived. The ground is allowed.
24. With respect to loan from M/s. Network Realty Private Ltd, confirmation of loan of Rs. 500000/-, the AO made the addition only on the basis that the said loan was not reflected in the balance sheet of the lender. We find that the AO did not give credence to the documents/evidences furnished by the assessee without any cogent foundation. The assessee submitted return of income alongwith computation of income and audited financial statement for the financial year 2017-18 relevant to assessment year 2018-19;
confirmation to establish the genuineness of transaction. We find that the AO never conducted any independent enquiry with the bankers of the lender, or any verification of the income tax records of the lender.
Furthermore, the AO did not discredit the assessee's explanation that the source of the said loan was share capital and reserves and surplus.
In such view of the matter, we are of the considered view that the addition of the said loan has been validly explained and its addition u/s 68 is misconceived. The ground is allowed.
25. As far as loan from Shri. Neeraj Choudhary is concerned, the same was added only due to the fact that the assessee could not file Page 23 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd his confirmation. We note that the AO however, did not controvert the assessee's explanation that the said lender was in Jail for violating the SARFESAI Act (Bank Defaulter) and Negotiable Instruments Act (Cheque Bouncing). Nor The AO made any independent enquiry whether the said loan was adjusted against allotment of the property sold by the assessee. The judicial custody of the lender would create impossibility of performance, such as providing of confirmation from lender, and therefore without making any enquiry, the ld AO cannot discredit or disbelieve the assessee's explanation. We further find that the AO has not controverted the assessee's explanation that there was an opening balance and payment during the year of Rs. 83,13,602/- and there was closing balance of Rs. 10,32,19,354/-. In such circumstances when opening balance of Rs. 10,10,32,956/- is accepted and repayment of Rs. 83,16,602/- is accepted, the addition of loan received of Rs.1,05,00,000/- is misconceived. We therefore are of the considered view, in conclusion, that the assessee has successfully discharged its onus by establishing the identity, creditworthiness of the lenders, and genuineness of the loan transactions received from M/s. Divya Builders and Contractors Pvt Ltd.; M/s. Network Realty Private Ltd, and Shri. Neeraj Choudhary. In view of the aforesaid, aggregate addition made and sustained of Rs. 1,90,00,000/- of the loans for Assessment year Page 24 of 25 ITA Nos.5750 to 5752/Del/2025 M/s Rise Projects (P) Ltd 2018-19 u/s 68 of the Act, therefore, is hereby directed to be deleted.
The grounds are allowed.
26. Since the appeal has been decided on merits, no adjudication is made on legal grounds.
27. In the result, appeal of assessee in ITA Nos.5750, 5751 and 5752/Del/2025 is allowed.
Order was pronounced in the open court on 18.03.2026.
Sd/- Sd/-
(MADHUMITA ROY) (NAVEEN CHANDRA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 18.03.2026
f{x~{tÜ
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asstt. Registrar, ITAT, New Delhi
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