J U D G M E N T

PURUSHAINDRA KUMAR KAURAV, J.

1. The present appeal under Section 260A of the Income Tax Act, 1961 [“Act”], impugns the order dated 13.04.2018 passed by the Income Tax Appellate Tribunal [“ITAT”], whereby, appeal of the respondent-assessee being ITA No. 6507/Del/2017 was allowed for the Assessment Year [“AY”] 2013-14.

2. The respondent-assessee is a company engaged in the business of civil construction as contractor and real estate developer. The respondent-assessee filed its Income Tax Return [“ITR”] on 30.09.2013, declaring a loss of Rs.5,30,72,598/- and paid taxes on book profits under Section 115JB of the Act and the same was processed under the provision of Section 143(1) of the Act. Thereafter, the case of the respondent-assessee was selected for scrutiny assessment and a notice under Section 143(2) of the Act was issued.

3. Subsequently, on 28.03.2016, the Assessing Officer [“AO”] passed an order under Section 143(3) of the Act determining the total loss of Rs.5,10,62,730/-. While framing the assessment order, the AO made the following additions: -

i) Addition of Rs.89,37,613/- under Section 68 of the Act on account of sundry creditors which included Transearch Consultants Pvt. Ltd. [“TCPL”]

ii) Addition of Rs.5 crores under Section 68 of the Act on account of unsecured loans from M/s. Maple Technology Ltd. [“MTL”], and M/s. Mari Gold Overseas Limited. [“MOL”]

4. Being aggrieved by the order of the AO, the respondent-assessee preferred an appeal before the Commissioner of Income-Tax (Appeals) [“CIT (A)”], who vide order dated 22.09.2017, partly allowed the appeal of the respondent-assessee. The CIT(A), out of the total addition of Rs.89,37,613/- made by the AO on account of sundry creditors, deleted the addition of Rs.71,37,613/- holding that the balance due to the respective parties was coming from previous years. However, it upheld the addition of Rs.18,00,000/- on account of TCPL holding that the genuineness of the credit was not proved. The CIT(A) also upheld the addition of Rs.3.70 crores and Rs.1.30 crores made by the AO on account of outstanding loans due to MTL and MOL, respectively, holding that the genuineness of the loans was not proved because both the above companies were not carrying out any business activity.

5. Thereafter, the respondent-assessee preferred an appeal before the ITAT. Vide order dated 13.04.2018, the ITAT allowed the appeal and deleted the additions in entirety. The Revenue, therefore, has preferred the instant appeal.

6. Vide order dated 02.08.2023, this Court had admitted the present appeal on the following questions of law: -

“(i) Whether the ITAT erred, on facts and in law, in deleting the addition of Rs. 18,00,000/- made by the AO under Section 68 of Act, in relation to the Sundry Creditor, Transearch Consultation Pvt. Ltd.? (ii) Whether the ITAT misdirected itself, in facts and in law, in deleting the addition of Rs.5,00,00,000/- made by the AO under Section 68 of the Act in relation to unsecured loan received from Maple Technology Ltd. and Marry Gold Overseas Limited?”

7. The Revenue has challenged the order of the ITAT, firstly, on the ground that the ITAT has failed to appreciate that the respondent- assessee had failed to discharge the onus to prove the genuineness of the amount of Rs. 18,00,000/- on account of the sundry creditor, TCPL. 8. Secondly, the Revenue has also assailed the findings of the ITAT on the ground that the ITAT has ignored the fact that the unsecured loan amount of Rs.5 crores on account of MTL and MOL has not been explained by the respondent-assessee and is therefore, liable to be taxed under Section 68 of the Act.

9. It is, therefore, the case of the Revenue that the order of the ITAT suffers from perversity and thus, liable to be quashed.

10. Learned counsel for the respondent-assessee, on the other hand, vehemently opposed the arguments and he submitted that since the sundry credit to the tune of Rs. 15,00,000/- was accepted to be genuine, it cannot