MACE VENTURE,KOLKATA vs. I.T.O., WARD - 4(1), KOLKATA

That the Order passed u/s 250 is bad in law as well as on facts of the case.

That the Hon'ble Commissioner of Income-tax (Appeals) passed a non- speaking order dated 23.01.2026 by not properly considering the facts, evidence and explanations already on record, and merely confirmed the additions made by the Assessing Officer without making independent examination, making the order unsustainable.

That the Hon'ble Commissioner of Income-tax (Appeals) wrongly upheld the addition of Rs.28,53,87,047/- made by the Assessing Officer under ITA No(s). 467/KOL/2026 Assessment Year(s) 2023-24 section 68, even though the unsecured loans were fully explained with proper details of the lenders, their capacity and genuine banking transactions, and also failed to appreciate that section 68 applies only to fresh credits during the year and not to opening balances or loans that were largely repaid through recognised banking channels.

That the Hon'ble Commissioner of Income Tax (Appeals) wrongly upheld the addition of Rs. 28,53,87,047/- made by the Assessing Officer in paragraph 3.5.1 of the Assessment Order without considering the documentary evidences and documents submitted with written submissions as required by Commissioner of Income tax (Appeals) vide his notice dated 08/12/2025, even though the so-called discrepancy was only interest of Rs 1,41,12,047/- (after TDS) which had already been recorded. The addition was made without proper understanding of the fact.

The Hon'ble Commissioner of Income-tax (Appeals) has erred in sustaining the addition under section 68 merely on alleged assumptions and discrepancies, without bringing any evidence on record to show that the loans were bogus or accommodation entries

That the Hon'ble Commissioner of Income-tax (Appeals) wrongly upheld the disallowance of interest of Rs. 1,56,80,054/-, even though this disallowance arose only because of the section 68 addition and cannot stand on its own, and also ignored the fact that the interest was genuinely paid for business purposes through banking channels after deducting TDS.

The Hon'ble Commissioner of Income-tax (Appeals) has erred in confirming the addition of Rs.60,80,37,864/- by disallowing the cost of acquisition under Section 48, even though the corresponding sales and capital gains were accepted. This disallowance was made without rejecting the books of account or showing that the purchases were not genuine, and despite the fact that all transactions were fully supported by demat statements, bank records, and books of account.

That the appellant craves to leave, add, amend or adduce any of the grounds of appeal during the course of appellate proceedings."

Brief facts of the case are that the assessee had filed the return of income for the AY 2023-24 on 28.10.2023 declaring total income at ₹2,19,13,840/-. During the assessment proceedings, the Assessing Officer (hereinafter referred to as Ld. 'AO') investigated the genuineness of the unsecured loans, business losses set off against other heads, and short-term and long-term capital gains. Since the assessee had failed to ITA No(s). 467/KOL/2026 Assessment Year(s) 2023-24 substantiate its claims with cogent documentary evidence, the Ld. AO made an addition of ₹28,53,87,047/- u/s 68 r.w.s. 115BBE of the Act treating the closing balance of unsecured loans as unexplained credits. Further, the Ld. AO disallowed the deductions amounting to ₹60,80,37,864/- claimed u/s 48 of the Act on capital gains, holding that the cost of acquisition remained unsubstantiated, and additionally disallowed an interest expenditure of ₹1,56,80,054/- paid on the unverified unsecured loans. The Ld. AO passed the assessment order u/s 143(3) r.w.s. 144B of the Act on 19.03.2025, determining the total income of the assessee at ₹93,10,18,805/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who, in the absence of cogent supporting documentary evidences, noted that the assessee had failed to establish the genuineness of the unsecured loans, the claimed interest expenditure and the purchases reported in the return of income. Hence, the Ld. CIT(A), upheld the assessment order and accordingly, dismissed the appeal of the assessee.

Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

None appeared on behalf of the assessee and, therefore, the appeal was heard with the assistance of the Ld. DR.

We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). The Ld. DR submitted that nothing was filed before the Ld. CIT(A). The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld. The Bench, however, noted that the order of the Ld. CIT(A) is a non-speaking order. The same is extracted as under:

Ground no.3 objects to addition of unsecured loan amounting to Rs.28,53,87,047/- as unexplained cash credit u/s 68. 3.1 In view of the rationale and grounds explained in the paragraph number 3.4.2, 3.4.3 and 3.4.4 of the assessment order, it is held that the assessee has failed to establish the genuineness of the unsecured loans reported by the assessee in the ITR and to explain the discrepancy of Rs.1,41,12,047/- in the total amount of unsecured loans in absence of cogent supporting documentary evidences. Therefore, the closing balance of the Unsecured loans (including deposits) From others of Rs. 28,53,87,047/- reported by the assessee in the ITR is treated as unexplained credits and added to the total income of the assessee for the year under consideration u/s 68 r.w.s. 115BBE of the Act. The addition of Rs. 28,53,87,047/- u/s 68 is confirmed.

Ground no.4. objects to addition of Rs.1,56,80,054/- being interest on unsecured loans disallowed.

1 In view of the rationale and grounds explained in the paragraph number 3.4.8 and 3.4.9 of the assessment order, it is held that in the background of unsubstantiated unsecured loans discussed, that the assessee has failed to establish the genuineness of the interest expenditure of Rs.1,56,80,054/ reported by the assessee in the ITR. Therefore, the interest expenditure of Rs.1,56,80,054/- paid to others debited to its Manufacturing, Trading and Profit and Loss account for the year under consideration claimed by the assessee in the ITR is disallowed and added back to the total income of the assessee for the year under consideration. The disallowance of Rs. 1,56,80,054/- is confirmed.

Ground no.5 objects to addition of Rs. 60,80,37,864/- being cost of acquisition claimed u/s 48. 5.1 Under the circumstances and the rationale and grounds explained in the paragraph number 3.4.5, 3.4.6 and 3.4.7 of the assessment order, it is held that the business transactions of the assessee have remained unsubstantiated and unexplained and that the assessee has failed to ITA No(s). 467/KOL/2026 Assessment Year(s) 2023-24 establish/substantiate the genuineness of the purchases reported by the assessee in the ITR and to substantiate the deductions claimed u/s 48 of the Act and to explain the source of investments made during the year under consideration in absence of cogent supporting documentary evidences. Therefore, the deductions of Rs.57,39,05,421/- claimed u/s 48 of the Act on short-term capital gain and of Rs.3,41,32,443/- on long-term capital gain as cost of acquisition for the year under consideration totalling to Rs. 60,80,37,864/- are disallowed and added back to the total income of the assessee for the year under consideration. The addition of Rs. 60,80,37,864/- claimed u/s 48 of the Income-tax Act, 1961 is confirmed.

In the result, the appeal filed by the assessee is dismissed. Commissioner of Income-tax (Appeals) Income Tax Department”

Thus, we find that the order of the Ld. CIT(A) is a highly cryptic order without even mentioning the grounds raised and the findings of the Ld. AO as there is only a reference to the paragraphs of the assessment order. We note that section 250(6) of the Act casts a duty upon the Ld. CIT(A) to pass an order in appeal which should state the points for determination and a decision as well as the reason for arriving at such decision. We find that in the appeal before the Ld. CIT(A), the assessee claims to have filed the written submission as is mentioned in Ground No. 4 of the appeal memo and also in the 1st paragraph of the appeal order which mentions the assessee filing written submissions on 15/12/2025 but there is no discussion in the appeal order on the same. (Madras) it has been held that a speaking order on merits with reasons and findings is to be passed by Commissioner (Appeals) on basis of ground raised in assessee's appeal; he cannot dispose the assessee's appeal merely by holding that the Assessing Officer's order is a self- speaking order which requires no interference. It has also been held in ITA No(s). 467/KOL/2026 Assessment Year(s) 2023-24 the case of Commissioner of Income-tax (Central) Nagpur v. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay) after discussing the provisions of sections 250(1) and 251(1) that the law does not empower the CIT(A) to dismiss the appeal for non- prosecution as is evident from the provisions of the Act. The Ld. CIT(A) has not been discussed the submission of the assessee. Therefore, we have no hesitation in remanding the appeal before him to pass a speaking order on the grounds of appeal raised before him after considering the issues raised before him, the findings of the Ld. AO, the submissions made by the assessee and the decision thereon. Thus, we deem it appropriate in the interest of justice and fair play that another opportunity needs to be provided to the assessee to represent his case properly before the Ld. CIT(A). In case, the assessee files any additional evidence, which has not filed before the Ld. the Ld. AO, he is directed to consider their admissibility as per rule 46A of the Income Tax Rules, 1962. For ready reference, Rule 46A is reproduced as under: “46A. (1) The appellant shall not be entitled to produce before the Joint Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the Assessing Officer, except in the following circumstances, namely :— (a) where the Assessing Officer has refused to admit evidence which ought to have been admitted ; or (b) where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer ; or (c) where the appellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal ; or ITA No(s). 467/KOL/2026 Assessment Year(s) 2023-24 (d) where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. (2) No evidence shall be admitted under sub-rule (1) unless the Joint Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) records in writing the reasons for its admission. (3) The Joint Commissioner] (Appeals) or, as the case may be, the Commissioner (Appeals) shall not take into account any evidence produced under sub-rule (1) unless the Assessing Officer has been allowed a reasonable opportunity— (a) to examine the evidence or document or to cross-examine the witness produced by the appellant, or (b) to produce any evidence or document or any witness in rebuttal of the additional evidence produced by the appellant. (4) Nothing contained in this rule shall affect the power of the Joint Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) to direct the production of any document, or the examination of any witness, to enable him to dispose of the appeal, or for any other substantial cause including the enhancement of the assessment or penalty (whether on his own motion or on the request of the Assessing Officer) under clause (a) of sub-section (1) of section 251 or the imposition of penalty under section 271.”

Thus, the order of the Ld. CIT(A) is hereby set aside and he is directed to consider the application for additional evidence and the additional evidence filed before him which were not filed before the Ld. the Ld. AO, as per Rule 46A of the Income Tax Rules, 1962 (“the Rules”) and either admit or reject the same after recording reasons as per sub- rule (2) of Rule 46A of the Rules. Further, as per sub-rule (3) of Rule 46A, he is also directed to grant an opportunity of being heard to the Ld. AO for examining the additional evidence and/or to produce any evidence in rebuttal of the same. Thus, the order of the Ld. CIT(A) is hereby set aside and the appeal is restored before him for taking decision on the admission of the additional evidence and thereafter disposal of the grounds of appeal on merits by passing a speaking order.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 22nd July, 2026. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 22.07.2026 Bidhan (Sr. P.S.)

CIT-

CIT(DR), Kolkata Benches, Kolkata.

Guard File. //// By order