आदेश / ORDER

PER PARTHA SARATHI CHAUDHURY, JM

The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals), Raipur-3, dated 31.07.2025 for the assessment year 2017-18 as per the following grounds of appeal:

“Gr. No.1

On the facts and circumstances of the case and in law, assessment made u/s.143(3) dt.28-12-2019 by ITO- Bhatapara is invalid, since notice issued u/s143(2) by ITO on 11-8-18 is invalid who was not having pecuniary jurisdiction over the assessee for issuing notice u/s143(2) for AY17-18 as per CBDT Instruction No.1/2011, dt.31-1-11, Instruction No.6 dt.8-4-11 & Notification issued by Chief CIT, Raipur dt.30-5-11 which is binding on IT authorities u/s.119, since returned income is Rs.12,24,340; assessment made u/s.143(3) by the ITO, who was not having valid authority of law for making assessment over the assessee, is invalid & is liable to be  quashed."

Gr.No.2

"On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in sustaining addition of Rs.14,00,000 on account of unsecured loan u/s. 68 as unexplained cash credits, which is unjustified and is liable to be deleted.

Gr.No.3

"On the facts and circumstances of the case and in law, ld. CIT(A) has erred in sustaining addition of Rs.55,245, which is unjustified & is liable to be deleted."

Gr.No.4

 "On the facts and circumstances of the case and in law, ld. CIT(A) has erred in sustaining addition of Rs.25,000, which is unjustified & is liable to be deleted."

2. At the very outset, the Ld. Counsel for the assessee submitted that he is not pressing Ground of appeal No.1. Having heard the submissions of the Ld. Counsel, Ground of appeal No.1 is dismissed as not pressed.

3. As regards Ground of appeal No.2 in respect of addition of Rs.14,00,000/- on account of unsecured loan u/s.68 of the Income Tax Act, 1961 (for short ‘the Act’) treating as unexplained cash credit, it was held and observed by the A.O as follows:

“5.2 The contention of the assessee has been perused. The loan received from other than family member’s i.e. from (i) Shri Rajkumar Vaswani (HUF), ii) Shri Rajkumar Vaswani, iii) Shri Naresh Vaswani and Smt. Divya Vaswani are accepted in view of reply filed by the assessee and considering their creditworthiness and particularly looking to the fact that assessee does not have any influence over their business. However, in the case of loan taken from the following family members, the genuineness and creditworthiness is not proved for the following reasons:

The above lenders have shown a meager income of Rs. 2,96,990/- in their ITR of 2017-. It is further noticed that the above lenders has shown income from business in which no books of account are kept. No specified business is found shown and income has been shown on estimate basis and no payment of any income tax. Mere filing of return is not sufficient ground to establish that the income shown by any person is genuine. Further verification of their bank statement reveals no major transaction except with the assessee is reflected in the said bank account. Thus the genuineness of transaction and the creditworthiness of the lender are not found established. The contention of the assessee firm that the lender is assessed to tax since long is not a sufficient ground to establish the creditworthiness of the lender. Thus the genuineness and creditworthiness of the loan totaling to Rs.14,00,000/-from the above four lender is not established. In this regard, reliance is place on the decision of Hon'ble Chhattisgarh High Court in the case of Kushal Prasad Manhar Vs CIT reported in [2014] 52 Taxman.com335(Chhattisgarh)/[2011] 198 Taxman 137 (Chhattisgarh) wherein on similar issue, the Hon'ble High Court has decided the case in favour of the department. In view of the above discussion, the said loan of Rs. 14,00,000/- is treated as unexplained cash credit of the assessee firm and the same is added back to the income returned u/s 68 of the Income tax Act, 1961 and taxed in accordance w