Vikran Engineering Wins ₹6.8 Cr ITAT Tax Appeal

The case originated from a search action under Section 132 of the Income Tax Act, carried out on 24th March 2021.
For AY 2016-17, the Assessing Officer framed an assessment under Section 153A.
An addition of ₹6,79,64,220 was made, comprising:
₹6,37,10,000 treated as unexplained cash credit under Section 68 in respect of unsecured loans from four lender entities.
₹42,54,220 being disallowance of interest paid on such loans under Section 37.
This addition was upheld by the CIT(A)-11, Pune vide order dated 8th November 2024.
The company subsequently preferred an appeal before the ITAT.

The ITAT accepted the company's submissions and dropped the proceedings.
The tribunal held that the company had duly discharged the onus of proving:
The identity and creditworthiness of the lenders.
The genuineness of the loan transactions under Section 68.
It was also noted that the loans, along with interest, were repaid during the year itself.
Final Ruling: The tribunal dropped the entire demand of ₹3,96,75,696 and deleted the addition of ₹6,79,64,220, allowing the company's appeal.

Quantifiable Impact: The order results in the deletion of a tax demand of ₹3,96,75,696 (comprising tax and consequential interest) for AY 2016-17.
Contingent Liability: The company currently discloses a contingent liability of ₹3,96,75,696. This liability will stand extinguished once the order is given effect by the concerned income tax department.
Operational Impact: The company does not foresee any material impact on its financial, operational, or other activities.

B-2 & B-3, B Wing, 3rd Floor, Ashar IT Park, Road No.16-Z, Wagle Industrial Estate, Thane - 400604.