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आयकर अपील(cid:10)य अ(cid:11)धकरण, ‘ए’ (cid:16)यायपीठ, हैदराबाद।

IN THE INCOME TAX APPELLATE TRIBUNAL

‘A’ Bench, Hyderabad

(cid:1)ी िवजय पाल राव, माननीय उपा(cid:15)(cid:16) एवं (cid:1)ी मंजूनाथ जी, माननीय लेखा सदti के सम(cid:16)

BEFORE SHRI VIJAY PAL RAO, HON’BLE VICE PRESIDENT &

SHRI MANJUNATHA.G, HON’BLE ACCOUNTANT MEMBER

आयकर अपील सं./ITA No.1669/Hyd/2025

(cid:26)नधा(cid:28)रण वष(cid:28)/Assessment Year: 2016-17

Vijay Kumar, v. The DCIT,

Plot 839Q, Road No.44A, Jubilee Circle-6(1),

Hills, Hyderabad-500 033. Hyderabad.

[PAN: AABHV 5499 R]

(अपीलाथ /Appellant) (!"यथ /Respondent)

अपीलाथ(cid:9) की ओर से/ Appellant by : Mr. K.C. Devdas, CA &

Mrs. S. Divya, CA

(cid:15)(cid:16)थ(cid:9) की ओर से /Respondent by : Mr. S.A. Mathivanan, Sr.AR

सुनवाई क% तार(cid:10)ख/Date of Hearing

: 11.06.2026

: 24.06.2026

घोषणा क% तार(cid:10)ख /Date of Pronouncement

आदेश / O R D E R

PER MANJUNATHA.G, AM:

This appeal filed by the assessee is directed against the order of the

Commissioner of Income Tax (Appeals), National Faceless Appeal Centre

(NFAC), Delhi, dated 06.10.2025, and pertains to assessment year 2016-

17.

ITA No.1669/Hyd/2025

Vijay Kumar

:: 2 ::

2. The brief facts of the case are that the assessee Shri Vijay Kumar,

HUF, filed its return of income (RoI) for AY 2016-17 on 14.10.2016

declaring total income of Rs.1,84,52,020/-. The case was selected for

scrutiny and during the course of assessement proceedings, the AO

observed that the assessee has claimed Long Term Capital Loss of

Rs.7,44,462/- on sale of gold. In this regard, the assessee was requested

to furnish documentary proof of purchase & sale along with working

details. In response, the assessee filed the sales & purchase bills of gold

along with Wealth Tax returns filed for the relevant assessement years.

The assessee further submitted that during the FY 2011-12, it has

purchased 5000 grams of gold bars for Rs.1,12,51,760/- and the same

has been loaned to M/s.P. Satyanarayana & Sons, a partnership firm

@6% interest per annum. The firm issued receipts, vouchers for the

quantity of gold bullion and also paid 6% interest per annum on the gold

loan and the same has been offered to tax. The assessee further

submitted that the firm has returned the gold ornaments equivalent to

5458 grams with 91.60% purity in the Financial Year relevant to AY 2016-

17. The said ornaments were immediately sold to M/s.P. Satyanarayana

& Sons on 27.02.2016 for a consideration of Rs.1,47,50,000/- and

computed long term capital loss of Rs.7,44,462/-. In support of

arguments, filed relevant details including relevant sales & purchase bills

along with loan details, etc.

ITA No.1669/Hyd/2025

Vijay Kumar

:: 3 ::

3. The AO after considering the relevant submissions of the assessee

and also taking note of various facts observed that the assessee has failed

to explain transaction is at arm’s length going by date & events which is

evident from the fact that the assessee has purchased gold from M/s.P.

Satyanarayana & Sons and the same has been loaned to the above firm

on the very same day. Further, the assessee had also failed to file

relevant details at conversion of gold bullion in gold ornaments along with

charges paid for conversion. Although, the assessee was not in physical

position of the bullion which was with the firm it continued to show the

possession of bullion in the Wealth Tax return filed. Further, it can be

seen from the VAT returns filed from February, 2016, there is no

Unregistered Dealer (URD) purchase shown by the firm. From the above,

it appears that the entries of purchase of gold bullion and subsequently

loaned to firm and received back so as to sell the jewellery are in the

nature of accommodation entry made by the assessee and the

partnership firm in the books of accounts without there being any actual

transactions. Therefore, the entire sale consideration of Rs.1,47,50,000/-

shown by the assessee under the head ‘Long Term Capital Gains’ has

been treated as unexplained cash credit and made addition u/s.68 of the

Act.

4. Aggrieved by the as