DCIT, CENTRAL CIRCLE - 4(4), KOLKATA, KOLKATA vs. DHANASHREE ELECTRONICS PVT LTD , KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No.1562& 1563 & 1564/KOL/2025 Assessment Year: 2018-19& 2020-21 & 2021-22 DCIT, Central Circle – 4(4)......................................................................................Appellant Aayakar Bhawan Poorva, 5th Floor, Room No. 509, 110, Shanti Pally, Kolkata- 700107 Vs. Dhanashree Electronics Pvt Ltd………………....…….................................….Respondent Plot No – XL 16, Block-Ep & GP Rashmi Building, Sech Bhawan, Sector-V, Kolkata- 700091 [PAN No. AABCD0954E] Appearances by: Manish Tiwari, (F.C.A)appeared on behalf of the Appellant. Sallong Yaden, Addl. CIT(DR), CIT DR ,appeared on behalf of the Respondent. Date of concluding the hearing : July 08 , 2026 Date of pronouncing theorder : July 21 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: These appeals filed by the revenue is directed against the order dated 25.04.2025 of the National Faceless Appeal Centre (NFAC), passed under Section 147 & 147r.w.s143(3) of the Assessment Year 2018-19 & 2020-21 & 2021-22 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”). Since the issues are common in all the appeal, hence all the ITA appeals are taken up together for disposal by taking No.1562/2025as a lead case. 2. The brief facts of the case are that the assessee had filed its original return of income u/s 139(1) of the Act on 29.10.2018 declaring a total income at Rs.2.67.95.520/ The same was processed

ITA No.1562 & 1563 & 1564/Kol/2025 u/s 143(1) of the Act. Later, a search and seizure operation u/s 132 of the Act was of "Jain Group" of concerns/ persons at various places. Subsequent to the search operation, the cases of "Ladhuram Toshniwal Group were centralized and the jurisdiction of the assessee was transferred to the charge of the DCIT, Central Circle-4(4), Kolkata vide order u/s 127 of the Act by Competent Authority. Subsequently, a notice u/s 148 of the Act was issued to the assessee on 27-10-2023. The assessee had filed return of income in response to the notice issued u/s 148 of Act on 11-12-2023 declaring taxable income same as earlier i.e., at Rs. 2,67,95,520/-. Subsequently, statutory notice u/s 143(2) of the Act dated 12.12.2023 & u/s 142(1) of the Act dated 13.12.2023 were issued by the AO to the assessee along with the detailed questionnaire, calling for various details/documents/explanations in connection with the assessment proceedings. In response to the said notices, the authorized representative of the assessee has made written submission on 11-01- 2024 along with details/ documents etc. Copies of reasons recorded as well as copy of relevant information and materials relied upon, as uploaded on the Insight portal, were also provided to the assessee by the AO. In response to the same, the A/R of the assessee had appeared and furnished details, submissions & explanations on entries found in seized evidences, reconciliation of such entries to explain issues emerged out of seized/impounded materials. The submissions/details furnished by the assessee were perused by the AO. Later, the AO had passed the asst. order u/s 147/143(3) of the Act on 06-02-2024 determining the total income of the assessee at Rs.3.12,93,208/ On perusal of the assessment order it is observed that the AO had made only three additions viz. a) Addition u/s 68 of the Act in the form of unsecured loan totalling to Rs.21. 62,500/- received from one creditor namely M/s Paritosh Electricals Pvt. Ltd. which was alleged by the AO

ITA No.1562 & 1563 & 1564/Kol/2025 as bogus. b) Disallowance of corresponding interest amount of Rs.23,24 375/- and c) commission expenses of Rs 10.813/-being 0.5% of such unsecured loans u/s. 69C r.w.s. 115BBE of the Act. 3. Aggrieved by the said order, assessee preferred appeal before the CIT(A) wherein appeal of the assessee has been allowed by observing thus:- 6.2.18. In view of the various judicial pronouncements cited by assessee together with various evidential documents submitted by the assessee it can be inferred that since the assessee had taken loan in case of normal business and repaid the said loan through banking channel in the next FY the assessee cannot be said to be beneficial owner of the money without any cogent evidence brought by the AO on record and addition under section 68 by the AO cannot be sustained. Additionally as discussed above, the assessee's burden is confined to prove identity of the creditors, creditworthiness of creditor and genuineness of the transaction with reference to transaction between assessee and creditor and the same cannot be extended to include source of such creditor for the purpose of section 68 of the Act. During the year under consideration, the assessee had taken an unsecured loan of Rs.25,00,000/- from M/s Paritosh Electricals Pvt. Ltd. However, it was noticed by the AO that the assessee had repaid Rs.3,37,500/- out of the said loan during the same year. Hence, the AO had added the outstanding amount of loan i.e., Rs.21,62,500/-. The AO had failed to accept the fact that the acceptance of loan has been established vide the confirmation and bank statements filed during the appellate proceedings. Hence, the addition of Rs.21,62,500/-made by the AO u/s 68 of the Act is deleted.

ITA No.1562 & 1563 & 1564/Kol/2025 6.2.19. As the addition on the unsecured loan has been deleted by the AO, the corresponding addition on interest payments against the such loans of Rs. 23,24,375/- is also liable to be deleted as the same was paid by the assessee through proper banking channel and the said was reflected in the audited P&L. A/c and books of the assessee. Hence, the corresponding addition on such interest payments are also liable to be deleted. Further, the said interest payment was reflected in the audited books of accounts of the assessee andpaid through banking channel. The AO had failed to bring any corroborative evidence on record to substantiate the fact that the aforesaid interests were paid from unexplained sources of the assessee and outside books of it. Hence, the disallowance u/s 36(1)(ii) can't be invoked in any manner. Therefore, the addition totaling to Rs. 23,24,375/- is hereby deleted. Consequently these grounds of appeal raised by the assessee are allowed. 6.2.20. Again, the assessee's contention in this ground No. 3 is perused. As in the discussions made in the above grounds, the afore- mentioned unsecured loan transactions are declared to be genuine, there no question arises in respect of availing entry by the assessee from any entry operator. The investigation wing as well as the AO had neither found any incriminating evince which can prove that the assessee had actually paid Rs.10,813/- to the said lending entities for availing any accommodation entry nor the said lending entities and their directors or key persons had admitted that they had taken such commission @0.5% against accommodation entry. Hence, the AO's observation that there may be expenses incurred by the assessee in respect of commission paid to the entry operators is nothing but an imaginary fictional story, Hence, in view of the above the addition of Rs. 10,813/-as estimated by the AO @0.5% of total loan of Rs. 21,62,500/- is liable to be deleted. Hence, this ground of the assessee is also allowed.

ITA No.1562 & 1563 & 1564/Kol/2025 4. Being aggrieved by and dissatisfied, the Revenue preferred appeal by taking following grounds:-

1) Whether on the facts and in the circumstances of the case Ld. CIT(A) has erred in adjudicating the matter in favour of the assessee without any verification.

2) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in ignoring the settled position of law of sec 68 of the Act, that the onus of providing the identity, and creditworthiness of the parties from whom the assessee received money, as well as the genuineness of the transaction, lies upon the assessee and the assessee has miserably failed to discharge such onus in the instant case.

3) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the impugned addition made by the A.O. u/s 68 of the Income Tax Act, 1961, by ignoring that these transactions were of highly suspicious nature, and the action of the A.O. was fully justified as per the well laid out principles of circumstantial evidence and preponderance of probability as elicited by the Hon'ble High Court of Calcutta in the case of Swati Bajaj (2022) 139 taxmann.com 352 (Calcutta)/(2022) 446 ITR 56 (Calcutta).

4) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has failed to appreciate the principles which have been well laid by the Hon'ble Supreme Court in the case of NRA Iron and Steel Vs. Pr. CIT(Central) [2020] 117 taxmann.com 752(SC)/ [2020] 273 taxman 14 (SC)/ [2020] 412 ITR 161 (SC).

5) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made by the A.O. u/s 68 of the Income Tax Act, 1961 by ignoring that these transactions were of highly suspicious nature, as have been well laid out with principles of

ITA No.1562 & 1563 & 1564/Kol/2025 circumstantial evidence and preponderance of probability elicited by the Hon'ble High Court of Calcutta in the case of Pr. CIT(Central)-2 Vs. BST Infratech Ltd [2024] 161 taxmann.com 668 (Calcutta)/[2024] 468 ITR 111 (Calcutta). Ra. 76,83,162/-

6) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made by the A.O. u/s 68 of the Income Tax Act, which where based on the probability of surrounding circumstances, and human behaviour as laid down by the Hon'ble Supreme Court in the case of Sumati Dayal Vs. CIT [1995] 214 ITR 801 (SC) and CIT VS. Durga Prasad More [1973] CIT (SC), 500/ [1971] 82 ITR 540 SC.

7) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition made by the A.O. u/s 68 of the Income Tax Act, in a factual matrix wherein the explanation submitted the shareholders/ Directors were not reasonable or acceptable. The said principles were laid down by the Hon'ble High Court of Calcutta in the case of Balgopal Merchants (P) Ltd Vs Pr. CIT (2024) 162 taxmann.com 465 (Calcutta).

8) The appellant prays that the tax effect in the instant case is Rs.37,74,464/-, and the same is below the monetary limit prescribed by the CBDT Circular No. 9/2024 dated 17.09.2024. However, it is humbly prayed that the case falls within the exception clause 3.1h of circular No. 05/2024 dated 15.03.2024.

9) The appellant craves to add, modify or alter any of the ground(s) of append and/or adduce additional evidence at the time of hearing of the case. 5. Contrary to that Ld. AR supports the impugned order thereby submitting that there is no infirmity in the impugned order as the

ITA No.1562 & 1563 & 1564/Kol/2025 assessee at the time of assessment proceeding has submitted the details of taking of unsecured loans and parties from whom the assessee took loan have a valid PAN, CIN and they are filing return of income. The Ld. AR submits that the assessee has also furnished the complete postal address of the loan parties and in response to the notices issued u/s 133(6) most have complied. The Ld. AR submits that assessee has submitted copy of loan confirmation, source of funds of the loan creditor companies, copy of IT act acknowledgement and entire transaction right from the advancement of loan to the repayment of the loan has been carried through proper banking channel. 6. Upon hearing the submission of the counsel of the respective parties and on perusal of the impugned order, we find that assessee is engaged in the business of electrical goods and in order to meet the day-to-day business, he took loan from the Bhiksu Barter Pvt Ltd, Paritosh Electricals Pvt Ltd & Rajshree Developer Entrepreneur Pvt Ltd.The unsecured taken is interest bearing loan and interest has been paid, we further find that assessee has submitted following documents at the time of assessment proceedings which are as follows:-

Documents Submitted by assessee and loan creditor company Copy of Audited Financial Statement of all the Four loan Creditors Copy of Relevant Bank Statement reflecting transaction Copy of Loan Confirmations Source of Funds of the loan creditor companies. Copy of IT Acknowledgement of the loan

ITA No.1562 & 1563 & 1564/Kol/2025 creditor Copy of Audited Financial Statement of the appellant company Computation of Income of the appellant company Copy of IT Acknowledgement of the appellant company

6.1. It is pertinent to mention here that loan taken during the year has been repaid. The Ld. CIT(A) in its order has held that on perusal of the submitted ledger, copies and confirmation of the loans, it is noticed that part of the said loan was repaid by the assessee with payment of due interest after deducing TDS on the same. Hence, the assessee cannot be alleged to be the beneficiary of the said file. The Ld. CIT(A) has followed the decision passed by the Kolkata High Court compensate in PCIT Vs Alom Extrusions Limited wherein the Hon’ble High Court has deleted the addition made of loan credits u/s 68 of the Act by taking note of the fact of repayment of the loan. In the present case, we find that assessee has submitted sufficient documentary evidences with regard to the genuineness, creditworthiness and identity of the loan creditor and moreover the loan has been repaid. 7. Keeping in view the discussion made above, we do not find any merit in appeal of the Revenue. Accordingly, the appeal of the Revenue is hereby dismissed. Since in other appeal also, the issues are common,hence the order passed in the present appeal would apply in other appeal also as Mutatis Mutandis. In the result, all the appeal filed by the Revenue are hereby dismissed.

ITA No.1562 & 1563 & 1564/Kol/2025

Kolkata, the 21st July , 2026.

Sd/- Sd/-

[Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member

DC Dated:. 21.07.2026.

Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- 5. CIT(DR)

//True copy// By order Assistant Registrar, Kolkata Benches

ITA No.1562 & 1563 & 1564/Kol/2025