INCOME TAX OFFICER, WARD-33(2), KOLKATA, KOLKATA vs. KHUSHBOO SHAH, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH AT KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No(s). 457/KOL/2026 Assessment Year(s) 2019-20 ITO, Ward-33(2), Kolkata Khushboo Shah Vs. (Appellant) (Respondent) PAN: ARDPB8525D CO No(s). 30/KOL/2026 Arising Out of ITA No(s). 457/KOL/2026 Assessment Year(s) 2019-20 Khushboo Shah ITO, Ward-33(2), Kolkata Vs. (Appellant) (Respondent) PAN: ARDPB8525D Appearances: Assessee represented by : S.S. Gupta, AR. Department represented by : Dipu Koley, Addl. CIT, Sr. DR. Date of concluding the hearing : 05.05.2026 Date of pronouncing the order : 03.08.2026 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the Revenue as well as the cross-objections filed by the assessee are against the common order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the AY 2019-20 dated 23.09.2025. 1.1 The Registry has informed that the appeal is barred by limitation by 66 days. The Revenue has filed an affidavit for condonation of delay of 77 days in filing the appeal before the ITAT by explaining the reasons

“1. That the Ld. AO erred in law as well as in facts in passing the order appealed against in as much as in view of the facts and circumstances of the case no such order was at all liable to be passed and the Ld. CIT(A) erred in partly confirming the same. 2. That the Ld. AO erred in law as well as in facts in making addition u/s. 69A in the hands of the appellant assessee on account of alleged loan transactions of Rs. 5,13,60,000/- and the Ld. CIT(A) erred in treating the

5.1 For the sake of clarity, the contents are tabulated as under:

S. Name Loan Net Worth of Gross Total MCA Repl Loan Loan Bank Copy Notor Audite Remarks N Transacti Company as Income of Master y Acc Acc State of ised d on Amt at 31st relevant FY Data copy Confirm Confirm ment ITR Affida Finan March 2019 of ation of ation of of vit cial 133( FY the year lend State 6) 2018-19 of er ment square co's of FY off 18-19 1 Alcove 57,85,000 1,19,42,51,00 3,75,14,649 Active Repli Attached Attached Attach Attac - Attach Identity Constructio 0 ed, ed hed ed of lender, n Private Copy Genuinen Limited Attac ess of hed transacti on and creditwor thiness of loan provider establish ed 2 Almond 80,00,000 22,21,05,096 1,70,139 Active Notic Attached Attached Attach Attac - Attach -do- Securities e not ed hed ed Private recei Limited ved 3 Amar Nath 55,50,000 NA 4,20,96,288 NA Repli Attached Attached Attach Attac - NA -do- Shroff ed, ed hed Copy Attac hed 4 Asvah 31,00,000 95,78,95,295 1,90,560 Active Repli Attached Attached Attach Attac Attac Attach -do- Traders ed, ed hed hed ed Private Copy Limited Attac hed 5 Blaise 25,00,000 96,83,02,317 5,93,940 Active Repli Attached Attached Attach Attac - Attach -do- Buildcon ed, ed hed ed Private Copy Limited Attac hed 6 Dhruvtara 50,00,000 72,22,83,689 1,78,100 Active Repli Attached Attached Attach Attac Attac Attach -do- Synthetics ed, ed hed hed ed & Copy Texturising Attac (P) Ltd. hed 7 Durvish 25,00,000 94,66,67,925 1,81,350 Active Repli Attached Attached Attach Attac - Attach -do- Vyapaar ed, ed hed ed Private Copy Limited Attac hed 8 Fareast 20,00,000 10,88,30,000 6,77,430 Active Repli Attached Attached Attach Attac - Attach -do- Distributor ed, ed hed ed Private Copy Limited Attac hed 9 Karkish 20,00,000 7,85,90,849 19,90,512 Active Repli Attached Attached Attach Attac - Attach -do- Vyapaar ed, ed hed ed Private Copy Limited Attac hed 10 Pastor 15,00,000 55,86,07,909 1,87,446 Active Repli Attached Attached Attach Attac - Attach -do- Merchants ed, ed hed ed Private Copy Limited Attac hed

11 PNC 50,00,000 14,90,77,223 15,03,308 Active Repli Attached Attached Attach Attac - Attach -do- Capital ed, ed hed ed Trust Copy Limited Attac hed 12 Prix India 2,00,000 92,00,127 -1,39,132 Merged Repli Attached Attached Attach Attac - Attach -do- Limited with ed, ed hed ed Alcove Copy Constru Attac ction hed Private Limited (Sl No 1) 13 Safal 10,00,000 4,06,58,708 19,712 Active Notic Attached Attached Attach Attac - Attach -do- Suppliers e not ed hed ed Private recei Limited ved 14 Sushila 50,25,000 1,09,72,072 NA NA Repli Attached Attached Attach Attac - Attach -do- Devi Bajaj ed, ed hed ed Copy Attac hed 15 Unique 22,00,000 26,90,20,382 1,89,842 Active Repli Attached Attached Attach Attac Attac Attach -do- Ropes & ed, ed hed hed ed Fabrics Copy Private Attac Limited hed T 5,13,60,0 ot 00 al 6. The Ld. AR submitted that the assessee is a builder and during the year under consideration, was carrying on the profession of interior design and brokerage, and the loans were received in the earlier years, which were received from 15 parties. Our attention was also drawn to page 96 onwards of the paper book relating to the creditors, and it was submitted that these details were filed before the Ld. CIT(A) as well as before the Ld. AO. As an illustration, the details of documents relating to Alcove Construction Pvt. Ltd. being loan confirmation, MCA status, ITR acknowledgment, and audited financials are enclosed at pages 96 to 146 of the paper book filed before us. However, it was highlighted by the Bench that while there was an opening balance of ₹2,53,26,771/-, certain amounts were also received during the year, so it cannot be said that the entire loans were received in the earlier years. The closing balance is shown at ₹NIL after payments of ₹3,30,04,242/- were made

Section 68 of the Income-tax Act, 1961 - Cash credit (Loans) - Assessment year 1962-63 - Assessee received loan from three individuals under hundis - Notices issued to these creditors under

6.1 Thus, the decision is different since no further enquiries were made in that case while the Ld. AO had asked the assessee to furnish the further details.

6.2 Similarly, in the case of another creditor Asvah Traders Pvt. Ltd., the documents for which appear from page 156 to 183, it was noted that the breakup of loans was not mentioned at page 181 to 182 of the paper book filed, in which the loans to body corporates are mentioned at ₹2,61,32,893/- and to others are mentioned at ₹1,11,20,927/-. This confirmation also does not bear the name of the person who has signed the same. This confirmation of account sent by the assessee, which is enclosed at page 161 of the paper book, also does not bear the name of

SL Name of Amount Response . Name of correspondin Summon of loan PAN to the No the Party g lender issued on involved summons . entity (in Rs.) MOHAMMED SAHIL AQEPC0502 AL HAMD 11/03/20 Did not 1 CHOWDHUR D / PROPERTIES 25 / appear. No & NA Y / ARDPB8525 PRIVATE 13/03/20 one 2 KHUSHBOO D LIMITED 25 appeared. SHAH

SL Name of Amount Response . Name of correspondin Summon of loan PAN to the No the Party g lender issued on involved summons . entity (in Rs.) KARKISH ARVIND AGOPK3540 VYAPAAR 13/03/20 No one 20,00,000 3 KHEMKA K PRIVATE 25 appeared. /- LIMITED PASTOR RINA JNOPS8870 MERCHANTS 13/03/20 No one 15,00,000 4 SANTRA L PRIVATE 25 appeared. /- LIMITED No one appeared. DHRUVTARA Only reply SYNTHETICS was sent FALGUNI AHFPG8730 & 11/03/20 by the 50,00,000 5 GUHA M TECTURISING 25 company /- PRIVATE and not LIMITED the person summone d. ALCOVE YASHASWI CGQPS5937 CONSTRUCTI 13/03/20 No one 57,85,000 6 SHROFF J ON PRIVATE 25 appeared. /- LIMITED ALMOND BTSPJ6930 SECURITY 13/03/20 No one 80,00,000 7 RAVI JOSHI J PRIVATE 25 appeared. /- LIMITED No one appeared. Reply was earlier sent that BLAISE the SHUBHANA ELWPM762 BUILDCON 13/03/20 furnished 25,00,000 8 KR MAJI 7G PRIVATE 25 explanatio /- LIMITED n regarding unsecured loan be considered . ARUN PNC CAPTIAL AFQPK8449 13/03/20 No one 50,00,000 9 KUMAR TRUST A 25 appeared. /- KHEMKA LIMITED MANJIT AIWPJ1727 DURVISH 13/03/20 No one 25,00,000 10 JAIN B VYAPAAR 25 appeared. /-

SL Name of Amount Response . Name of correspondin Summon of loan PAN to the No the Party g lender issued on involved summons . entity (in Rs.) PRIVATE Reply LIMITED furnished to the earlier notice u/s 133(6) by the company was resubmitte d.

It can be seen from the table above that the assessee herself did not appear in response to the issued summons u/s 131 despite her submission before the NFAC that she would like her case to be transferred to the JAO. Therefore, the assessee has not been able to discharge the onus of proving the identity and creditworthiness of the lenders as well as genuineness of the claimed loan transactions aggregating Rs. 5,13,60,000/- during the F.Y. 2018-19. Further, the assessee has also not been able to explain the exact purpose for which the loans taken during the F.Y. 2018-19 were put to use. It is also interesting to note that over the years starting from F.Y. 2018-19, the balance sheet of the assessee is largely composed of unsecured loans which have been used to further advance loans to others. Also, it is seen that the assessee has been reporting either losses or very less income as compared to her capital base. A brief explanation is as per the following table:-

Financial Year Unsecured loans taken Total taxable income

2018-19 Rs. 6,67,90,030/- Rs. NIL

2019-20 Rs. 5,58,61,705/- Rs. 1,37,730/-

2020-21 Rs. 5,53,70,678/- Rs. 31,91,080/-

“5. Decision; Ground no 1 is general in nature. Grounds 2, 3, 4 and 5 are against reopening and reassessment u/s 147/148/148A. The appellant submitted that the AO initiated proceedings u/s 148A based on the information and material collected from the search proceedings without any independent application of mind. That copies of the information and statements during the course of reassessment proceedings initiated u/s 148A, based on which an alleged inference was drawn about accommodation entries, were not provided to the assessee. The AO also did not provide opportunity of cross examination of accommodation entry provider. It is clear from assessment records that all the procedures were correctly followed by the AO while reopening the assessment. Supreme Court in the case of CIT v. Kelvinator of India Ltd. [(2010) 2 SCC 723] has expressly held that the AO can exercise the power to reassess if she can satisfactorily conclude on the basis of the tangible material that the income has escaped assessment. The information received from Investigation wing is tangible material which is a sufficient reason to believe that income chargeable to tax has escaped assessment for the relevant year. Adequate opportunities were provided during assessment proceedings for cross examination, but the appellant did not respond to notices nor appeared to avail opportunity to cross examine. Hence, grounds 2, 3, 4 and 5 are dismissed. 5.1 Grounds 6 to 10 are raised against the addition of unsecured loans amounting Rs.5,13,60,000 under section 69A. Evidence was found during a search operation that one Birendra Kumar Patni was providing accommodation entries in lieu of commission. The appellant received