ITO, WARD-6(2), KOLKATA., KOLKATA vs. HIGHLIGHT PROPERTIES PVT. LTD., KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.59/KOL/2026 Assessment Year:(2013-14) ITO, Highlight Properties Pvt. Ltd., P-7, Chowringhee Square, 6 th Floor, Ward – 6(2), Vs. Kolkata Room No.13C, Kolkata – 700069, West Bengal [PAN: AACCH1823P] (Appellant) .. (Respondent) Appellant by : Shri Sanjit Kumar, CIT-DR Respondent by: Shri Siddharth Agarwal, Advocate Date of Hearing 25.06.2026 Date of Pronouncement 11.09.2026 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: This appeal preferred by the revenue against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as the “ld. CIT(A)”], dated 09.10.2025 for Assessment Year (AY) 2013-14.

ITA No.59/Kol/2026/A.Y.2013-14 ITO vs. Highlight Properties Pvt. Ltd. circumstances beyond the control of the revenue. Consequently, the delay in filing the appeal is hereby condoned and admit for hearing. 3. The only issue raised in Ground No.1 and 2 are deletion of addition by ld. CIT(A) of Rs.18,83,50,000/- as made by Assessing Officer (In short, ‘the AO’) u/s 69A of the Income-tax Act, 1961 (In short, ‘the Act’). 4. The facts of the case in brief are that assessee filed its return of income for A.Y. 2013-14 on 30.09.2013, declaring total income of Rs. Nil. The case was re-opened u/s 147 of the Act by issuing notice u/s 148 of the Act on 16.04.2021,on the basis of information received from Investigation Wing to the fact that respondent has received total of Rs.7,09,00,000/- from five entities. Thereafter, in consonance with the decision of Hon'ble Supreme Court in Civil Appeal No.3005 of 2022 in case of UOI vs. Ashish Agarwal and Ors, dated 05.04.2022, the said notice u/s 148A(b) of the Act was issued, which was complied by assessee vide detailed written submission dated 14.06.2022. The assessee submitted before the AO that the re-opening was barred by limitation and that the information relied upon by the AO to disturb the finality of the proceedings to re-open the case of the assessee for A.Y. 2013-14 was erroneous and factually incorrect. As per the information from the Investigation Wing, the assessee was the alleged beneficiaries of fund through layering from Bellash Supply Pvt. Ltd., Azzar Trading Pvt. Ltd., Aritro Supply Pvt. Ltd., Mandal Financial Consultancy and Hitendra Commercial Pvt. Ltd. However, it was contended by the assessee that there was no transaction from M/s Mandal Financial Consultancy during the year and that the nature of transactions with the other parties were explained as sale of investments disclosed in the regular books of account of the assessee. However, the AO after taking into account the replies of the assessee and responses of the

ITA No.59/Kol/2026/A.Y.2013-14 ITO vs. Highlight Properties Pvt. Ltd. parties u/s 133(6) of the Act, added the total amount shown in the credit side of the bank account of the assessee to the income of the assessee of Rs.18,83,50,000/- u/s 69A of the Act.

“5. Decision: 5.1 I have carefully considered the findings in the assessment order, grounds of appeals, statement of facts and written submissions filed by the appellant. In the present case, the AO, based on the information received from the investigation wing of the Income Tax Department that appellant was one of the beneficiaries of layering of funds, has made an addition u/s.69A of the Act with respect to all the amounts credited in the bank account (Axis Bank, Hemanta Basu Sarani Branch, Kolkata 700001, Alc. No. 911020044906644) during the year totaling to Rs. 18,83,50,000/-, The AO has mainly emphasized on the fact that the appellant has failed to submit the bank book and hence, the transactions credited in the bank account remained unexplained. Aggrieved with the order of AO, Appellant filed the current appeal with 10 grounds of appeal. The appellant has challenged the charging section under which the addition has been made. To effectively dispose of the appeal, Ground No. 4 is taken up first. 5.2 Ground of Appeal No.4: In this ground, appellant has contended that the AO has erred in invoking the provisions of Section 69A of the Income Tax Act, 1961 even though the contentious amounts have duly been recorded in the books of account of the appellant. The appellant submitted that the mandate of section 69A is that in order to be an income, there must be fulfilment of two conditions i.e. investments made in money, bullion, jewellery or other valuable article in the current year must not be recorded in the books of account AND either no explanation was offered or the explanation offered is not, in the opinion of the Assessing Officer, satisfactory. Since the word "and" has been used in the section, both the condition has to besatisfied in order to make addition u/s. 69A of the Act. As the transactions took place through the disclosed bank account of the appellant and recorded in the books of account of the appellant and hence, it is submitted that no addition u/s. 69A of the Act can be made.

ITA No.59/Kol/2026/A.Y.2013-14 ITO vs. Highlight Properties Pvt. Ltd. In this regard, the appellant also invited attention to the decision of Smt. Teena Bethala, Bengaluru vs Income Tax Officer, Ward-4(3)(2) (ITA 1383/BANG/2019) which held as under: 7.3.2 In the facts and circumstances of the case, as narrated above, it is essential that the provisions of section 69A of the Act be extracted hereunder.- "69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money. bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money. bullion jewelleryorothervaluablearticle, orthe explanationofferedbyhimisnot, intheopinionoftheIncome-taxOfficer, satisfactory, themoneyandthevalueofthe bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.". 7.3.3 Onareadingof section 69A(supra), it isclearthat the onus is upon the AO to find the assessee to be the owner of any money, bullion, jewellery or valuable article and such money, bullion, jewellery or valuable article was not recorded in the books of account, if any, maintained by the assessee for any source of income. In these circumstances, the AO can resort to making an addition under section 69A of the Actonlyinrespectofsuchmonies/assets/articlesorthingswhicharenotrecorded intheassessee'sbooksofaccount.Inthecaseonhand, thecashdepositsare recorded in the books of account and are reportedly made on the receipt from a creditor. Further, the PAN and address of the creditor as well as ledger account copies of the creditor in the assessee's books of account have also been filed before the AO. In these circumstances, it is evident that the AO has not made out a case calling for an addition under section 69A of the Act. The assessee, apart from raising several othergrounds, has challenged the legality oftheadditionbeingmade undersection69Aof the Act. Insupportoftheassessee's contentions, the learned AR placed reliance on the decision of the ITAT Mumbai Bench inthe caseof DCITVs. Karthik Construction Co. in ITANo.2292/Mum/2016 dated 23.02.2018, wherein the Bench at para 6 thereof has held that additionunder section 69Aof the Act cannot be made in respect of those assets / monies /entrieswhicharerecordedintheassessee'sbooksofaccount.Inmyconsidered view, the aforesaid decision of the ITAT Mumbai Bench (supra) is squarely applicable to the facts of the case on hand, where the entriesare recorded inthe assessee's booksof account. In this view of the matter, I am of the

ITA No.59/Kol/2026/A.Y.2013-14 ITO vs. Highlight Properties Pvt. Ltd. opinion that the addition of Rs.6,30,000/- made under section 69A of the Act is bad in law in the facts and circumstances of the case on hand and therefore delete the addition of Rs.6,30,000/- made thereunder. The AO is accordingly directed." The appellant further placed reliance of the following decisions wherein it has been held that no addition u/s. 69A of the Act can be made where transactions took place through the bank account of the appellant and recorded in the books of account of the appellant:  ITO v. Pukhraj N. Jain [(95 ITD 281) (Mum.)];  ITO vs. Sukmal Sikdar [TS-5304-ITAT-2016 (KOLKATA)-O]  C. Govindappa v Asstt. CIT [74 TTJ (Bang) 249];  Smt. Jagmohan Kaur Bajwa vs. ITO [(ITAT Chandigarh) (ITA No. 962/Chd/2019) 5.3 I have gone through the written submissions filed during the appellate proceedings and also the submissions filed during the reassessment proceedings. I find force in the contention of the appellant that in order to be an income u/s. 69A of the Act, there must be fulfilment of both the conditions i.e. investments made in money, bullion, jewellery or other valuable article in the current year must not be recorded in the books of account AND no explanation is offered with respect to the same. The aforesaid position has been affirmed in various judicial precedents rendered by Hon'ble Tribunal as mentioned above including the Jurisdictional Tribunal. In the present case, the appellant, during the course of the reassessment proceedings, has duly submitted bank book recording the transactions vide submission dated 03/05/2023. Hence, the contention of the AO that the appellant has failed to produce bank book recording the transactions is incorrect. The relevant portion of the submission is reproduced below: "c) We append herewith relevant Bank Book as desired by you vide Annexure 2. Your goodself will appreciate that the assessee has no bank account on 01.04.2012 but closing balance as on 31.03.2013 of Rs.47,331.25 which matches with the bank book and bank statement already filed before you including on 12.04.2023." Further, the fact that the aforesaid amounts were credited in the bank statements is clearly evident from the order passed by the AO. The relevant paraof the order is reproduced below: "On perusal of the bank statement submitted by the assessee, it is observed that total credit of Rs. 31,33,70,000/-(between 06.10.2012 to 23.11.2013) was made to the bank account of the assessee company,

ITA No.59/Kol/2026/A.Y.2013-14 ITO vs. Highlight Properties Pvt. Ltd. the credits was followed 31,33,70,000/- for the above period. by immediate debit(within a day or two). Total debit of the account was also Rs.31,33,70,000/- for the above period. On verification of the bank statement submitted by the assessee company, it is noticed that during the year financial year i.e.2012-13. relevant to assessment year2013-14, an amount of Rs.18,83,50,000/- were credited and the same were debited......." In view of the above, it is evident that the aforesaid transactions have been duly reflected in the bank statement and recorded in the books of accounts. Hence, the addition made by the AO u/s. 69A of the Act for the amounts credited in the bank account and recorded in the books of accounts is not tenable as the twin conditions for applicability of section 69A is not fulfilled and accordingly, the addition made u/s. 69A of the Act amounting to Rs 18,83,50,000/- is hereby deleted. The Ground of Appeal No.4 of the Appellant is allowed.” 6. We have heard rival submissions and perused the materials available on record. We find that the case of the assessee has been assessed u/s 143(3)/147 of the At for the preceding assessment year 2012-13 wherein the transactions in the impugned bank account with Axis Bank, aggregating to Rs.31,33,70,000/- had already been examined by the Department and after accepting the contentions of the assessee, it was accepted that the assessee was a pass through entity and the income was estimated on commission basis in respect of the transactions in the Axis Bank in the assessment framed for A.Y. 2012-13. We note that the assessee furnished all these facts along with evidences before both the authorities below including the assessment order for preceding A.Y. 2012-13 which was re-opened for the deposits in the Axis Bank A/C exactly same reasons as in the current assessment year. We note that despite all these facts placed before the ld. AO, the assessment order dated 23.05.2023 u/s 147 r.w.s. 144B of the Act was passed by making addition of Rs.18,83,50,000/- u/s 69A of the Act. We also note that there were no separate transactions/entries of Rs.18,83,50,000/- in the said bank account

ITA No.59/Kol/2026/A.Y.2013-14 ITO vs. Highlight Properties Pvt. Ltd. and the said transactions were included in and part of the total credit of Rs.31,33,70,000/- as examined by the AO in the earlier re-assessment proceedings, which culminated in the passing of the order u/s 147 of the Act on 26.12.2019. We note that AO added the amount only for the reason that assessee had not furnished bank book and had failed to establish genuineness and creditworthiness of the transactions and also the fact that the letters issued u/s 133(6) of the Act were not responded by the parties. We note that AO relied on the reports of the Investigation Wing only and concluded that transactions were unexplained money u/s 69A as the assessee has not furnished source of receipts and thus the same remained unexplained. The AO also noted that the assessee has also not furnished the bank book with supporting documents. However, we note that the same was furnished before the AO with all the details qua the bank account i.e. Axis Bank Account. We also note that all the transactions were incorporated in the books of account of the assessee and therefore the order passed by the AO invoking of section 69A of the Act is completely wrong and was rightly deleted by the ld. CIT(A) after recording a categorical finding that the bank book and other evidences were furnished by assessee.

ITA No.59/Kol/2026/A.Y.2013-14 ITO vs. Highlight Properties Pvt. Ltd. not satisfactory in the opinion of the AO. We find that there are such investments by the assessee and the entries in the Axis bank account were recorded by the assessee in the books of accounts and assessee has offered full explanation qua the entries. The ld. CIT(A) while deleting the addition has categorically discussed the issue and relied on a series of decisions. Therefore, we do not find any infirmity or anomaly in the order passed by the ld. CIT(A) and consequently, we are inclined to uphold the same by dismissing the appeal of the assessee. The ground no. 1 and 2 are dismissed.

The order is pronounced in the open Court on 11/09/2026.

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIAL MEMBER ACCOUTANT MEMBER Kolkata, Dated: 11/09/2026 SAMANTA आदेश �ȧ ĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwarded to: 1. \ �Ȣ�ȡ�ȸ/ The Appellant 2. Ĥ×��ȸ/ The Respondent. 3. Ȳ�Ȳͬ��आयकर] �ǕÈ�/ Concerned CIT 4. आयकर] �ǕÈ�(अपील) / The CIT(A) 5. ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, आयकर\ �Ȣ�ȣ�\ͬ ����/ DR, ITAT, Kolkata 6. �ȡ�[�ȡ_�/ Guard file.

BY ORDER, // TRUE COPY // (Manish Bhoi) Deputy Registrar, ITAT, Kolkata