DEWARS GARAGE LIMITED,KOLKATA vs. D.C.I.T., CIRCLE - 5(1), KOLKATA

ITA 688/KOL/2026Status: DisposedITAT Kolkata21 September 2026AY 2023-202411 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the rent paid was at arm's length, offered to tax by the recipient, and supported by lease deeds. The interest liability and trade payables were not unexplained cash credits or income under Section 41(1) as they were existing liabilities. Advances from customers were adjusted or written back in the ordinary course of business.

What were the facts?

The assessee paid rent to a sister concern, which was disallowed by the AO and CIT(A) for lack of documentary evidence. The assessee also had an old liability for interest on a loan and outstanding trade payables, which were added back to income by the AO and CIT(A). Additionally, advances received from customers for car sales were treated as cash credits.

What were the issues?

Whether rent paid to a sister concern, old interest liability, and trade payables are valid expenses/liabilities or should be added to income as unexplained credits or ceased liabilities. Whether advances from customers for car sales constitute unexplained cash credits.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 37,Section 133(6),Section 68,Section 115BBE,Section 41(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA

Before: SHRI RAJESH KUMAR & SHRI PRADIP KUMAR CHOUBEY

For Appellant: Shri S. K. Pransukha, FCA
For Respondent: Shri Ruchika Sharma, Sr. DR
Hearing: 25.06.2026Pronounced: 21.09.2026

PER RAJESH KUMAR, ACCOUNTANT MEMBER:

This appeal is preferred by the assessee against the order of learned Commissioner of Income Tax, National Faceless Appeal Centre, (hereinafter referred to as the “ld.CIT(A)”], Delhi,dated22.12.2025 for the Assessment Year (AY) 2023-24. 2. The issue in Ground Nos.1 and 2 is not pressed, therefore, we dismiss these grounds as not pressed.

3.

The issue in Ground No.3 is against the order of ld. CIT(A) confirming of Rs.1,44,00,000/- as made by the Assessing Officer (In short, ‘the AO’) in respect of rent paid to its sister concern on the pea that documentary

ITA No.688/Kol/2026/A.Y.2023-24 Dewars Garage Ltd. vs. DCIT evidences and

The order continues below.

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