IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER Assessment year : 2017-18 Assessment year : 2017-18 Assessment year : 2017-18 Assessment year : 2017-18 Assessment year : 2017-18 Assessment year : 2017-18 CO No.43/PUN/2025 Assessment year : 2017-18 Assessment year : 2017-18 Assessment year : 2017-18 Assessment year : 2017-18 Assessment year : 2017-18 Assessment year : 2017-18 Assessee by : Shri Suhas Bora and Riya Oswal Department by : Shri S. Sadananda Singh, JCIT Date of hearing : 20-11-2025 Date of pronouncement : 08-01-2026

O R D E R

PER R.K. PANDA, VP:

This appeal filed by the Revenue is directed against the order dated

12.06.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2017-18. The assessee has filed the CO against the appeal filed by the Revenue. For the sake of convenience, the appeal filed by the Revenue and the CO filed by the assessee were heard together and are being disposed of by this common order.

2. Facts of the case, in brief, are that the assesse is a partnership firm engaged in the business of contractors, promoters, developers, builders and real estate developers. It filed its return of income on 28.10.2017 disclosing total income of Rs.44,06,250/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). Subsequently on the basis of information obtained that the assessee has taken unsecured loan of Rs.1.62 crores in cash through Shri Sachin Nahar, the Assessing Officer reopened the assessment by recording the following reasons, copy of which is placed at page 15 of the paper book:

3. The Assessing Officer accordingly issued notice u/s 148 of the Act dated 29.03.2021 in response to which the assessee filed its return of income on 11.05.2021 declaring total income of Rs.44,06,250/-. The Assessing Officer thereafter issued statutory notices u/s 142(1) and 143(2) of the Act in response to which the assessee submitted its reply. The assessee also filed objections against the reopening of assessment u/s 147 on 16.02.2022. The Assessing Officer disposed of the objections on 07.03.2022 as per the directions of Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd vs ITO reported in (2003) 259 ITR 19 (SC). Thereafter, the Assessing Officer issued notice u/s 142(1) of the Act dated 07.03.2021 stating that the objections raised have already been disposed of and asked the assessee to file its response to the notice issued.

4. During the course of assessment proceedings the Assessing Officer asked the assessee to explain as to why the said amount not be made taxable on account of violation of provisions of section 269SS and 269T of the Act. The assessee in response to the same gave the details of 16 parties from whom it had taken loan through proper banking channel. The Assessing Officer thereafter asked the assessee to furnish the documentary evidence substantiating the said loans which have been arranged through Sri Sachin Nahar. From the reply submitted by the assessee, he noted that during the course of search proceedings certain documents / loose sheets were seized wherein it has been found that the assessee had taken unsecured loans in cash through Sri Sachin Nahar. He reproduced some of the scanned sheets wherein it is clearly found that the loans have been made in cash. He, therefore, asked the assessee to explain as to why addition of the same should not be made to the total income of the assessee.

5. The assessee submitted that the total outstanding unsecured loan during the year under consideration was Rs.12,85,03,100/- which has already been disclosed in the financials submitted. The assessee during the year under consideration has taken loan of Rs.1,61,00,000/- from 16 parties through Sri Sachin Nahar. However, in absence of any details furnished by the assessee to prove the genuineness and creditworthiness of the loan creditors amounting to Rs.1,61