The reported ITAT Delhi ruling in Shriganesh Kirana (P) Ltd. v. ACIT says the company discharged its burden under Section 68 for a ₹1.40 crore unsecured loan from LVS Financial Services Pvt. Ltd. The Tribunal relied on the evidence of the lender’s identity and creditworthiness and the genuineness of the transaction. The available report does not establish the final outcome of separate disputes over interest, alleged commission, or reopening of the assessment.
What the ITAT Delhi ruling says
The reported order concerns Shriganesh Kirana (P) Ltd. v. ACIT, ITA No. 2536/Del/2026, for assessment year 2020-21. The appeal was heard on 14 July 2025, and the reported order is dated 30 September 2026. It arose from a CIT(A)-30, New Delhi order dated 14 February 2026.
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The Tribunal said the assessee had produced evidence sufficient to establish the lender’s identity and creditworthiness and the genuineness of the loan transaction. It therefore found that the company had discharged its burden under Section 68 in relation to the ₹1.40 crore credit. This describes the reported finding; it should not be read as confirmation that every addition or ground in the appeal was decided in the company’s favour.
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Why the Assessing Officer made the addition
The assessment was reopened on the basis of information associated with a 17 November 2021 search involving Galaxy Group and alleged entry providers. The Assessing Officer’s narrative characterized a ₹1,40,00,000 receipt from LVS Financial Services Pvt. Ltd. as an accommodation entry and treated it as unexplained cash credit under Section 68. That was the assessment’s allegation, not an independently established fact about the transaction.
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The assessment also disallowed ₹1,44,956 in interest and made a separate ₹4,20,000 addition under Section 69C, described as alleged commission calculated at 3% of the loan. The reported material identifies these issues but does not verify their final disposition by the Tribunal.
What evidence the Tribunal considered
The assessee described the receipt as an unsecured business loan that was later repaid. Its submissions described LVS as a company engaged in non-banking finance and referred to an RBI registration certificate. The reported order lists documentary material including:
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- A loan agreement, lender confirmation and lender ledger.
- The lender’s income-tax return and audited financial statements.
- Bank statements for both lender and borrower.
- Company records and repayment-related ledger entries.
The Tribunal stated that the loan was received through an account-payee cheque and considered the evidence as a whole when finding the Section 68 burden discharged. The reasoning is not a rule that a bank transfer or later repayment, standing alone, defeats an accommodation-entry allegation. The decision turns on the record described in this appeal, including material bearing on the lender’s capacity as well as the transaction trail.
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For readers assessing the significance of this ruling, the reported reasoning points to three evidentiary questions: who the creditor was, whether the creditor had the financial capacity to advance the sum, and whether the transaction was genuine. In this case, the order’s account refers to lender identity and financial records, loan documents and confirmations, banking records, and repayment-related entries.
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The assessment’s reliance on search-related information is part of the case background, but the available excerpt does not establish a broader holding about what search material or third-party information must show in every case. Nor does this ruling mean that producing documents with particular labels automatically proves a loan; their relevance and sufficiency depend on the record considered by the tax authorities and the Tribunal.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Related authority and limits of the available report
The reported text says the Tribunal also relied on DCIT v. Shomit Finance Ltd., ITA No. 8486/Del/2025, dated 5 June 2026, which involved an advance from the same lender. A secondary report also identifies Real Innerspring Technologies (P.) Ltd. v. ACIT and Capital Infra Projects (P.) Ltd. v. DCIT among the authorities discussed. The available excerpts do not provide a sufficient basis to detail or generalize the holdings of those other cases.
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The case text available for this account is from a legal reporting database, rather than an official ITAT-hosted order. Although it reports the order date as 30 September 2026, the complete final order is needed to confirm the precise disposition of the interest disallowance, the Section 69C commission addition, and the reopening or jurisdiction objections. Accordingly, this account does not say those matters were deleted or sustained.
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