SANJAYK KUMAR AGARWAL,SILIGURI vs. ACIT, CIRCLE-1, SILIGURI, SILIGURI

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 11.06.2026 for the AY 2016-17.

ITA No. 1959/KOL/2025 Shri Sanjay Kumar Agarwal; A.Y. 2016-17 3. The facts in brief are that the assessee filed the return of income u/s 139(1) of the Act. It is noted that on the basis of insight portal, the ld. AO reopened the assessment of the assessee by noting that the assessee has given a cash loan of ₹1,90,00,000/- to M/s Quotone Ceramic Pvt. Ltd. The notice u/s 148 of the Act was issued on 31.03.2023, and was duly complied with. Thereafter, the notices u/s 143(2) and 142(1) of the Act along with questionnaire were issue which were duly complied with by the assessee by filing all the details and information as called for and the fact has been confirmed by the ld. AO in para no.2 of the assessment order. The assessee during the course of assessment proceedings out rightly denied to advance any cash loans whatsoever to M/s Quotone Ceramic Pvt. Ltd. But despite that the assessment was framed u/s 144/ 147/144B of the Act vide order dated 18.03.2024. However, the ld. AO relied on the information available Onsight portal of the department and finally added the same to the income of the assessee as unexplained expenditure income u/s 69A of the Act in the assessment framed as stated above.

“In these grounds the appellant has challenged the assessment order passed u/s 144 of the Act and the addition of Rs.1,90,00,000/- made by the Assessing Officer. The appellant has submitted in the reply filed during the appellant proceedings that the loan of Rs.1,90,00,000/- did take place in FY 2014-15 (relevant to AY 2015-16). The appellant also submitted that the loan was given to Shri Manoj Kumar Agarwal (one of the directors of Qutone

ITA No. 1959/KOL/2025 Shri Sanjay Kumar Agarwal; A.Y. 2016-17 Group) through normal Banking channel whereas the allegation is that Rs.1,90,00,000/- was given as cash loan during FY2015-16. The appellant submitted that he was responsive throughout the assessment proceedings but the assessment has been completed u/s 144 of the Act and the replies submitted during the assessment proceedings have not been considered andnatural justice has not been provided as Shri Sunil Maglunia (whose statement was relied by the Assessing Officer) has filed sworn affidavit before the Assessing Officer denying the correctness of seized data. I find that for sake of justice it is necessary to examine the submission of the appellant. I, therefore set aside (under the provisions of proviso to Section 251(1)(a) of the Act effective from 01.10.2024) the assessment order dated 18.03.2024 for A.Y 2016-17 in this case and direct the Assessing Officer to complete the assessment afresh after giving the appellant opportunity of being heard.” 5. After hearing the rival contentions and perusing the materials available on record, the undisputed facts as culling out of the records are that the case of the assessee was reopened u/s 147 of the Act by the ld. AO after the ld. AO noted from the insight portal that assessee has advanced cash loan of ₹1,90,00,000/- to m/s Quotone Ceramic Pvt. Ltd. We note that the assessee throughout assessment proceedings has denied to have any such loan given during the F.Y. 2015-16 to the said party though, the assessee admitted to have advanced loan of ₹1,90,00,000/- to Shri Manoj Kumar Agarwal, one of the directors of Quotone Ceramic Pvt. Ltd. in F.Y. 2014-15 relevant to A.Y. 2015-16, which was advanced through banking channel. The assessee, thus, totally denied the transactions of any cash loan of ₹1,90,00,000/- in F.Y. 2015-16 relevant to A.Y. 2016-17. We note that the assessee has furnished before the ld. AO all the details and transactions as called for however, the ld. AO mainly half on the information available on insight portal of the department. We also note that the assessee has made compliance to all notices and show cause notices issued by the ld. AO during

ITA No. 1959/KOL/2025 Shri Sanjay Kumar Agarwal; A.Y. 2016-17 the assessment proceedings, which have been confirmed by the ld. AO in Para no.2 of the assessment order. But despite that the ld. AO proceeded to frame the assessment u/s 144 of the Income-tax Act, 1961 (the Act), which is incorrect and cannot be sustained as the assessment should have been framed u /s 143(3) of the Act. In our opinion, the onus of proofing any allegation when the same is denied by the assessee when the department is not having any corroborative or substantive evidences to prove the same shift to the Revenue specially when that is being relied to make any addition. Therefore, the addition based only on insight portal information is wrong and cannot be sustained. Moreover, the ld. AO relied on the statement Shri Sunil Maglunia, who has denied by filing a sworn affidavit before the ld. AO the correctness of the said information. We also note that the assessee has admitted to have advanced an unsecured loan of ₹1,90,00,000/- to Shri Manoj Kumar Agarwal one of the directors of the Quotone Ceramic Pvt. Ltd. in F.Y. 2014-15, relevant to A.Y. 2015-16, which is not in the impugned assessment year. We also note that the loan was advanced through banking channel. Therefore, we do not find any merit in the order passed by the ld. AO adding the said amount to the income of the assessee. Similarly, the ld. CIT (A) again restoring the issue to the file of the ld. AO for verification and examination is also not tenable in law as the ld. CIT (A) has no power u/s 250 of the Act to restore the issue to the file of the ld. Assessing Officer. Nevertheless the ld. AO has framed the assessment u/s 144 of the Act by ignoring the fact that the same should have been presumed

ITA No. 1959/KOL/2025 Shri Sanjay Kumar Agarwal; A.Y. 2016-17 u/s 143(3) of the Act. Accordingly, we direct the ld. AO to delete the addition. Ground no.3 is allowed.

Order pronounced on 22.07.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 22.07.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

Asst. Registrar Income Tax Appellate Tribunal, Kolkata