GODAWARI COMMERCE PVT. LTD.,HOWRAH vs. I.T.O., WARD - 2(3), KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA BEFORESHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.2283/KOL/2025 Assessment Years: (2011-12) Godawari Commerce Private ITO, Limited, Vs. Ward – 2(3), 13, Becharam Chowdhury Lane, Kolkata Howrah Maidan, Howrah – 711101, West Bengal [PAN:AABCG7458G] (Appellant) .. (Respondent) Appellant by : Shri Avijit Ghoshal, Advocate Respondent by: Shri Ambrish Mishra, Sr. DR Date of Hearing 19.08.2026 Date of Pronouncement 01.09.2026

O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER:

This appeal filed by the assessee is directed against order dated 22.08.2025by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi(hereinafter referred to as the “ld. CIT(A)”) passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year (A.Y.) 2011-12.

ITA No.2283/Kol/2025/A.Y. 2011-12 Godawari Commerce Pvt. Ltd. vs. ITO 3. The facts of the case in brief are that the assessee-company filed its return of income on 31.03.2012 for A.Y. 2011-12, declaring total income of Rs.1,44,930/-. Thereafter, the AO, on the basis of information of ADIT (Inv.), Unit – 2(1), Kolkata, reopened the case of the assessee u/s 147 of the Act by issuing notice u/s 148 of the Act, dated 29.03.2018. The said notice was complied by filing its return of income on 19.04.2018, declaring same income as the original return of income. Therefore, statutory notices u/s 143(2) and 142(1) of the Act along with the questionnaire were issued and served upon the assessee, which were duly complied with. The assessee furnished all the details and information along with profit and loss account etc. before the AO. The case was re-opened for the reason that the assessee is a beneficiary of Rs.50,00,000/- from the said companies. However, on the basis of reply/document furnished by the assessee, it was submitted that instead of Rs.50,00,000/-, the assessee made transaction of Rs.55,00,000/- with M/s Jay Ambe Casseettes Pvt. Ltd. and Rs.1,54,00,000/- with Venkatesh Sales Pvt. Ltd. and also Rs.57,20,000/- with Utkarsh Goods Pvt. Ltd. It was submitted that total transactions were at Rs.2,66,20,000/-. Therefore, the AO issued show cause notice to the assessee, asking for the clarification and the assessee replied the same, which according to the AO, was not sufficient to prove the genuineness of the transactions and creditworthiness of the parties. The AO noted that mere doing the transaction through the banking channels does not prove the nature of transactions to be genuine. According to the AO, these companies were shell companies and even the Inspector of Investigation Wing deputed has given a report that there was no such companies available at the registered addresses. The AO noted that these are only accommodation entries and accordingly, added the same to the income of the assessee.

ITA No.2283/Kol/2025/A.Y. 2011-12 Godawari Commerce Pvt. Ltd. vs. ITO 4. In the appellate proceedings, the ld. CIT(A) also dismissed the appeal of the assessee by observing and held as under:

“6.2.3 On examination of the facts and material on record, I find the following facts and observations to be pertinent: 1. It was noted by the A.O that M/s. Jai Ambe Casseettes Pvt. Ltd., M/s. Venkatesh Sales Pvt. Ltd., M/s. Utkarsh Goods Pvt. Ltd. were shell companies. As per the report of Inspector of the Investigation Wing the above companies had no office or subject at the registered address. The appellant has not addressed this glaring issue in its submissions. 2. It was noted that the companies were struck off due to non-compliance from the Registrar of Companies as per Master Data of MCA. 3. Analysis of bank statement of the assessee as well as the above three parties from whom the amounts were credited reveal a similar pattern of high volume and high frequency debits and credits and rotation of funds among the same related entities. As an illustration, while bank statement of the assessee shows credits from Jai Ambe Casseettes Pvt. Ltd., M/s. Venkatesh Sales Pvt. Ltd., M/s. UtkarshGoods Pvt. Ltd into account of the assessee; if we examine the bank statement of one of the above creditors M/s Jai Ambe Cassettes, it shows credit of Rs.5000000 on 20-04- 2010 from M/s. Utkarsh Goods Pvt. Ltd and transfer of the amounts on the same date to the assessee and to JMD Sounds Ltd. 4. The barely legible ITR copies of the buyer companies show nil income or loss returned. The essential condition of creditworthiness is thus not established. Mere filing of return does not establish the creditworthiness of the buyer parties. The fact that the above companies had no offices at the registered address, that they were struck off due to non-compliance from the Registrar of Companies, the lack of creditworthiness as evidenced by the returns with Nil or meagre income, and the very circular pattern of the transactions within the closed network of associated concerns clearly indicate that these were shell companies with whom the appellant stated to have carried out the transactions. In the light of the above, the appellant's contention that it has discharged the onus of establishing the genuineness of the transaction and the creditworthiness of the parties is found to be unconvincing. 6.2.4 In this context, reliance is placed on the decision of the Hon'ble Apex Court in the case of Sumati Dayal Vs. CIT 214 ITR 801 and the judgement of Hon'ble Delhi High Court in the case of CIT vs. NR Portfolio (P) Ltd. CIT vs. Precision FinancePvt. Ltd. [208 ITR 465]. The Indore Bench of ITAT in case of Agrawal Coal Corpn (Pvt) Ltd. Vs. Asstt. CIT 63 DTR 20 while dealing with a similar situation held that merely because the companies were registered with ROC, were filling return of income, having PANs/bank accounts, share application forms were submitted, but the same did not establish their identity as these companies might have been existing on 3

ITA No.2283/Kol/2025/A.Y. 2011-12 Godawari Commerce Pvt. Ltd. vs. ITO papers or in real sense at the time of registration but were specifically found to be non-existent. It is a well settled principle of law as laid down by the Hon'ble Apex Court in the case of Sumati Dayal Vs. CIT (214 ITR 801) (SC) that the true nature of transaction have to be ascertained in the light of surrounding circumstances. It needs to be emphasized that standard of proof beyond reasonable doubt has no applicability in determination of matters under taxing statutes. It is also well settled that tax authorities are entitled to look into surrounding circumstances to find out the reality of the transaction by applying the test of human probability. This was the principle laid down by the Hon'ble Supreme Court in the case of CIT Vs. Durga Prasad More 82 ITR 540 (SC). 6.2.5 It is also relevant to note that the Supreme Court of India in the case of Principal Commissioner of Income-tax (Central)-1 v. NRA Iron & Steel (P.) Ltd [2019] 103 taxmann.com 48 (SC) in which addition was under Section 68 of the Income-tax Act, 1961 being Cash credit on account of Share application money held that merely because assessee company had filed all primary evidence, it could not be said that onus on assessee to establish creditworthiness of investor companies stood discharged. Likewise, in the present instance, though the appellant claims to have submitted all documentary evidence before the A.O, it may also be noted that the mere fact of documentary compliance for e.g. that payments were made by cheque or that the applicants were companies, borne on the file of Registrar of Companies is not sufficient and the same were held to be neutral facts and did not prove that the transaction was genuine as was held in the case CIT v. Nova Promoters and Finlease (P.) Ltd. [2012] 342 ITR 169/206 Taxman 207/18 taxmann.com 217 (Delhi). Similar views were expressed by the jurisdictional Calcutta High Court in the case of CIT v. Precision Finance (P.) Ltd. [1994] 208 ITR 465/[1995] 82 Taxman 31 (Cal.). In view of the above facts and circumstances of the case and the judicial decisions as discussed above, the A.O's action in treating the amount credited in the books of accounts during the year as a non-genuine transaction i.e. unexplained credits are upheld and the appellant's ground is dismissed. 7. In the result, the appeal filed by the appellant is dismissed.” 5. We have heard rival submissions and perused the materials available on record. We note that the case of the assessee was re-opened u/s 147 of the Act after receiving information from Investigation Wing that assessee is a beneficiary of the accommodation transactions. However, during the assessment proceedings, the assessee submitted that the aggregate of the transactions as referred to by the AO were recorded in the books of accounts and that Rs.2,66,20,000/- were represented the purchases made by the

ITA No.2283/Kol/2025/A.Y. 2011-12 Godawari Commerce Pvt. Ltd. vs. ITO parties, which were discharge through banking channels. The books of account of the assessee were audited and assessee duly recorded the sale of shares in the books of account. The assessee also filed before the AO, the details of sales of shares and bank statements. The AO has merely relied on the information received from the ADIT, Investigation Wing and has not recorded his own finding. Moreover, the material relied by the AO was not confronted to the assessee, which is the violation of natural justice. We note that assessee has not been allowed sufficient opportunity of being heard. Under these circumstances, we are of the view, the addition made by the AO and as sustained by the ld. CIT(A) is wrong and cannot be sustained. Consequently, we set-aside the order of ld. CIT(A) and direct the AO to delete the addition.

The order is pronounced in the open Court on 01/09/2026.

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIALMEMBER ACCOUNTANT MEMBER Kolkata, Dated: 01/09/2026 SAMANTA आदेश �ȧ ĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwarded to: \ �Ȣ�ȡ�ȸ/ The Appellant 1. 2. Ĥ×��ȸ/ The Respondent 3. Ȳ�Ȳͬ��आयकर] �ǕÈ�/ Concerned CIT आयकर] �ǕÈ�(अपील) / The CIT(A) 4. 5. ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, आयकर\ �Ȣ�ȣ�\ͬ ����,/ DR, ITAT, Kolkata 6. �ȡ�[�ȡ ईल/ Guard file

BY ORDER, // TRUE COPY // Deputy Registrar, ITAT, Kolkata