SHIV SHANKER BANKA,KOLKATA vs. INCOME TAX OFFICER - WARD 5(1)/ KOLKATA, KOLKATA

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 07.10.2025 for the AY 2023-24.

ITA No.342/KOL/2026 SHIV SHANKER BANKA; A.Y. 2023-24 delay is for bonafide and genuine reasons and, hence, we condone the delay and adjudicate the appeal in the following paras.

ITA No.342/KOL/2026 SHIV SHANKER BANKA; A.Y. 2023-24 assessment order of UDPL for A.Y. 2014-15, 2016-17 and 2017-18, wherein the return incomes were accepted. The ld. AO however, treated the loan as accommodation entry by solely relying on the information from DDIT(Investigation) that in the statement recorded during the Survey of Shri Sushil Kumar Gupta, the UDPL is a shell company, controlled by the said person and UDPL lacked genuineness and creditworthiness and therefore, treated the transaction as non-genuine and bogus. The ld. AO consequently added the same to the income of the assessee by treating the same as unexplained money u/s 69A of the Act in the assessment framed u/s 143(3)/ 144B of the Act dated 23.04.2025.

4.1. In the appellate proceedings, the ld. CIT (A) simply affirmed the order of the ld. AO when the assessee failed to respond to various notices issued by ld. CIT(A) by deciding the issue of merit though the fact remains that there was no compliance before the ld. CIT (A).

4.2. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has received unsecured loan from M/s Uttam Dealers Pvt. ltd. on 12.06.2023 of ₹1,52,00,000/-, which was treated by the ld. AO as unexplained money u/s 69A of the Act. At the outset, we would like to mention that the addition made by the ld. AO is legally incorrect as the provisions of Section 69A of the Act are not applicable to the loan taken by the assessee. We also note that the assessee during the course of assessment proceedings, in response to questionnaire from the ld. AO furnished all the details and evidences like; master data of

ITA No.342/KOL/2026 SHIV SHANKER BANKA; A.Y. 2023-24 UDPL from the MCA portal, ITR acknowledgement, audited financial statement showing net worth of 50.31 crores, bank statement of UDPL, confirmation of account, details of source of source, assessment order of UDPL for A.Y. 2014-15, 2016- 17 and 2017-18, wherein the return incomes were accepted. The ld. AO has not pointed out any defect in the evidences and also not carried out any investigation into the issue.

4.3. We have also carefully perused the Section 69A of the Act and find that the same are applicable where 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 or the explanation offered by him is not, in the opinion of the ld. Assessing Officer is satisfactory.

4.4. We observe that the ld. AO mainly relied on the report of DDIT (Unit) 1(1), and the statement recorded of Shri Sushil Kumar Gupta. We note that the statement relied by the ld. AO of Shri Sushil Kumar Gupta without affording any cross objection to the assessee is again fatal to the addition made by the assessee. We also note that the statement recorded by the DDIT (Investigation) unit 1(1), during the survey of Shri Sushil Kumar Gupta has no evidentiary value unless corroborated by independent material. Further, we note that the assessments were framed by the Jurisdictional AO by accepting the return of incomes in case of UDPL for various assessment years as referred to above. Therefore, the department has itself contradictory its finding that it is a shell company. We note that the loan advanced by the said

ITA No.342/KOL/2026 SHIV SHANKER BANKA; A.Y. 2023-24 company to the assessee has been accepted by the department in the scrutiny proceedings in the case of lender company. Therefore, additions sustained by the ld. CIT (A) cannot be sustained though the assessee made no compliance before the ld. Commissioner of Income-tax (Appeals) nonetheless the ld. CIT (A) decided the issue on merit. 4.5. In our opinion where the assessee has furnished all the details and evidences before the authorities and loan was repaid and the authorities have not done any enquiry, then no addition can be made. The case of assessee is squarely covered by the decisions of the Hon’ble Calcutta High court in number of cases namely PCIT-2, Kolkata Vs. Rahul Premier India Agency Private Limited in ITAT/133/2025, IA No.GA/2/2025 vide order dated 05.08.2025, PCIT Vs. M/s Narayan Tradecom Pvt. ltd. in ITAT/76/2025, IA No. GA/1/2025 dated 10.06.2025, PCIT Vs. Alom Extrusions Ltd. ITAT/268/2024, IA no. GA/1/2024, GA/2/2024 dated 17.12.2024, PCIT Vs. M/s Edmond Finvest Pvt. ltd., in ITAT/28/2024, GA/2/2024 dated 26.02.2024, PCIT Vs. Parwati Lakh Udyong, ITAT/2/2024, IA No.GA/1/2024 dated 19.02.2024. In all the above decisions the Hon'ble court has held that where the assessee has filed all the evidences qua the loan creditors before the ld. AO and loans are also repaid then the same cannot be added us/ 68 of the Act. Similarly, the of assessee is squarely covered by the decision of the Hon’ble Gujarat High Court in the case of Ambe Tradecorp (P.) Ltd., reported in [2022] 145 taxmann.com 27 (Gujarat), wherein it has been held as under :-

ITA No.342/KOL/2026 SHIV SHANKER BANKA; A.Y. 2023-24 "3. The issue in this case arose in respect of the assessment year 2012-2013. It appears that the two loan transactions of Rs. 8,50,00,000/- and Rs. 23,70,00,000/- received by respondent assessee from one M/s. J.A Infracon Private Limited and M/s. Satya Retail Private Limited were treated by assessing officer to be sham in the sense that the creditworthiness etc. of the giver of the loan were not established. Accordingly, the assessing officer made addition under section 68 of the Act.

3.1 While the assessing officer dealt with unexplained cash credit from the M/s. Satya Retail Private Limited and from M/s. J.A Infracon Private Limited in his order in paras 5.1 and 5.2 respectively, the Commissioner of Income-tax in the appeal preferred by assessee found on facts and the material before it that the said two cash creditors had been holding there identity, creditworthiness and genuineness in respect of the loan transactions.

3.2 The appellate authority observed that, "In this regard, it has been noticed that ledger accounts and confirmations of the aforesaid two parties have been provided by the appellant to the AO in the assessment proceedings. Thereafter, the AO also carried out the independent inquiries u/s. 133(6) of the I.T. Act and in compliance thereto both the companies have submitted the requisite information."

3.3 The information supplied by assessee was duly noticed by appellate authority and facts in that regard were recorded also to arrive at a finding that the unsecured loans to the aforesaid parties have been paid by account payee cheques from the bank account of the assessee which was not in dispute, muchless in doubt. The accounts were finally settled with the repayment of the loan to the lender companies. 3.4 When the revenue preferred appeal before the Appellate Tribunal, the Tribunal confirmed the findings recorded by the Appellate Authority. The Tribunal referred to the decision of Durga Prasad More (82) ITR 540 and also in Sumati Dayal (214) ITR 801, to further record on the basis of the facts that the assessee had furnished the details such as copy of ledger account, bank statements, income tax returns, balance sheet etc. It was also recorded that notice under Section 133(6) of the Act was issued to the said parties which were duly responded by them. The identity of the parties could not be, therefore disputed, recorded the tribunal. The aspect was also noticed that the assessee was not beneficiary of the loan received by it and the loan was repaid by the assessee in the subsequent year. It led to unacceptable conclusion that the impugned transaction was a business transaction between the assessee and the loan parties and that they could not be doubted for their genuineness.

ITA No.342/KOL/2026 SHIV SHANKER BANKA; A.Y. 2023-24 3.5 While the revenue has tried to put up a case that the transactions were in the nature of accommodation entries, this case has only presumptive and assumptive value not supported by any factual data. On the contrary, on the basis of the material before the authorities, the transactions were found to be genuine. 4. Learned advocate for the appellant attempted to emphasize that for the purpose of application of Section 68 of the Act, three ingredients were necessary. Firstly, identity of the parties to the transaction of loan, second is the creditworthiness of such parties and thirdly the genuineness of the transaction. It was submitted in vain that neither of the ingredients were satisfied. 5. As discussed above, since the requisite material was furnished by assessee showing the identity and since the assessee was not beneficiary when the loan was repaid in the subsequent year, even the ingredients of creditworthiness and genuineness of transaction were well satisfied. 6. The Tribunal rightly recorded in para 29 of the judgment, "Once repayment of the loan has been established based on the documentary evidence, the credit entries cannot be looked into isolation after ignoring the debit entries despite the debit entries were carried out in the later years. Thus, in the given facts and circumstances, were hold that there is no infirmity in the order of the Ld.CIT-A. " 7. For the reasons recorded above, no question of law much less substantial questions arises in this appeal. It stands meritless and accordingly dismissed. 4.6. Considering these facts of the case, we are inclined to set aside the order of ld. CIT (A) and direct the ld. AO to delete the addition.

Order pronounced on 02.09.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY)M (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 02.09.2026 Sudip Sarkar, Sr.PS

ITA No.342/KOL/2026 SHIV SHANKER BANKA; A.Y. 2023-24 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

Dy. Registrar Income Tax Appellate Tribunal, Kolkata