QUESTQUEEN NIRMAN LLP,KOLKATA vs. I.T.O., WARD - 32(1),, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. Nos.69 & 70/KOL/2026 Assessment Year:(2020-21) Questqueen Nirman LLP, ITO, 95A, Park Stret, 5th Floor, Kolkata – Vs. Ward – 32(1), 700016, West Bengal Kolkata [PAN: AAAFQ6552] (Appellant) .. (Respondent) Appellant by : Shri Manish Tiwari, FCA Respondent by: Shri Praveen Das Chowdhury, Sr. DR Date of Hearing 29.06.2026 Date of Pronouncement 16.07.2026

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

These two appeals preferred by the assessee against the orders of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as the “ld. CIT(A)”], dated 12.12.2025 for the Assessment Year (AY) 2020-21.

ITA Nos.69 &70/Kol/2026/AY 2020-21 Questqueen Nirmal LLP vs. ITO 3. Issue in Ground No.2 is against the order of ld. CIT(A) confirming the addition of Rs.2,10,00,000/- as made by the AO in respect of cash credit u/s 68 of the Act. 4. The facts of the case in brief are that assessee filed its return of income on 01.12.2020, declaring total income of Rs. Nil. Thereafter, case of the assessee was re-opened u/s 147 of the Act by issuing notice u/s 148 of the Act on 29.03.2024 after following procedure laid down u/s 148A of the Act, i.e., after passing order u/s 148A(d) of the Act by issuing show cause notice u/s 148A(b) of the Act and after taking into consideration the reply of the assessee to the said show cause notice. The assessee complied with the said notice by filing return of income on 31.05.2024. Thereafter the statutory notices along with questionnaire were issued and duly complied with the assessee by furnishing all details/evidences in respect of loan creditors comprising names, addresses, ITRs, audited balance sheet and confirmation including the bank statements. The AO on the perusal of the records available and on the basis of details furnished before the AO regarding the purchase of immovable property, found that the assessee has taken unsecured loan from M/s Innovative Commercial Pvt. Ltd. amounting to Rs.2,10,00,000/-. The AO in order to independently verify the transaction also issued notice u/s 133(6) of the Act to M/s Innovative Commercial Pvt. Ltd. to establish the identity, creditworthiness and genuineness of the transactions. However, the said loan creditor did not respond the same. Thereafter, the AO noted that during the course of search and seizure action conducted on 24.08.2022 at the premises of M/s Encash Entertainment Ltd. and others located at 12 Mirza Ghalib Street, 2nd Floor, Kolkata – 700016 and statement of Shri Sachet Saraf has been recorded u/s 132(4) of the Act on

ITA Nos.69 &70/Kol/2026/AY 2020-21 Questqueen Nirmal LLP vs. ITO 26.08.2022, wherein the said person stated that he was engaged in providing accommodation entries to various parties. The AO extracted the relevant part of the statement at Page No.16 of the assessment order. The AO, accordingly, treated the said loan taken by the assessee as unexplained cash credit u/s 68 on the ground that same is nothing bogus accommodation entries and adding the same to the income of the assessee in the assessment proceedings u/s 143(3) r.w.s. 144B of the Act, dated 07.03.2025.

ITA Nos.69 &70/Kol/2026/AY 2020-21 Questqueen Nirmal LLP vs. ITO Even we note that the assessee has repaid the loan to the tune of Rs.1,16,00,000/- and the remaining amount paid during the subsequent financial year. It is noteworthy to mention that loan creditor did not comply with the letter issued u/s 133(6) of the Act. In our opinion, when the assessee furnished all the evidences before the authorities below and the loan is repaid either in the financial year or subsequent financial year then the provisions of section 68 cannot be invoked. The case of assessee is squarely covered by the decisions of the Hon’ble Calcutta High court in number of cases namely PCIT-2, Kolkata Vs. Rahul Premier India Agency Private Limited in ITAT/133/2025, IA No.GA/2/2025 vide order dated 05.08.2025, PCIT Vs. M/s Narayan Tradecom Pvt. ltd. in ITAT/76/2025, IA No. GA/1/2025 dated 10.06.2025, PCIT Vs. Alom Extrusions Ltd. ITAT/268/2024, IA no. GA/1/2024, GA/2/2024 dated 17.12.2024, PCIT Vs. M/s Edmond Finvest Pvt. ltd., in ITAT/28/2024, GA/2/2024 dated 26.02.2024, PCIT Vs. Parwati Lakh Udyong, ITAT/2/2024, IA No.GA/1/2024 dated 19.02.2024. In all the above decisions the Hon'ble court has held that where the assessee has filed all the evidences qua the loan creditors before the ld. AO and loans are also repaid then the same cannot be added us/ 68 of the Act. Similarly, the case of assessee is squarely covered by the decision of the Hon’ble Gujarat High Court in the case of Ambe Tradecorp (P.) Ltd., reported in [2022] 145 taxmann.com 27 (Gujarat), wherein it has been held as under:

"3. The issue in this case arose in respect of the assessment year 2012-2013. It appears that the two loan transactions of Rs. 8,50,00,000/- and Rs. 23,70,00,000/- received by respondent assessee from one M/s. J.A Infracon Private Limited and M/s. Satya Retail Private Limited were treated by assessing officer to be sham in the sense that the creditworthiness etc. of the giver of the loan were not established. Accordingly, the assessing officer made addition under section 68 of the Act.

ITA Nos.69 &70/Kol/2026/AY 2020-21 Questqueen Nirmal LLP vs. ITO 3.1 While the assessing officer dealt with unexplained cash credit from the M/s. Satya Retail Private Limited and from M/s. J.A Infracon Private Limited in his order in paras 5.1 and 5.2 respectively, the Commissioner of Income- tax in the appeal preferred by assessee found on facts and the material before it that the said two cash creditors had been holding there identity, creditworthiness and genuineness in respect of the loan transactions. 3.2 The appellate authority observed that, "In this regard, it has been noticed that ledger accounts and confirmations of the aforesaid two parties have been provided by the appellant to the AO in the assessment proceedings. Thereafter, the AO also carried out the independent inquiries u/s.133(6) of the I.T. Act and in compliance thereto both the companies have submitted the requisite information." 3.3 The information supplied by assessee was duly noticed by appellate authority and facts in that regard were recorded also to arrive at a finding that the unsecured loans to the aforesaid parties have been paid by account payee cheques from the bank account of the assessee which was not in dispute, muchless in doubt. The accounts were finally settled with the repayment of the loan to the lender companies. 3.4 When the revenue preferred appeal before the Appellate Tribunal, the Tribunal confirmed the findings recorded by the Appellate Authority. The Tribunal referred to the decision of Durga Prasad More (82) ITR 540 and also in Sumati Dayal (214) ITR 801, to further record on the basis of the facts that the assessee had furnished the details such as copy of ledger account, bank statements, income tax returns, balance sheet etc. It was also recorded that notice under Section 133(6) of the Act was issued to the said parties which were duly responded by them. The identity of the parties could not be, therefore disputed, recorded the tribunal. The aspect was also noticed that the assessee was not beneficiary of the loan received by it and the loan was repaid by the assessee in the subsequent year. It led to unacceptable conclusion that the impugned transaction was a business transaction between the assessee and the loan parties and that they could not be doubted for their genuineness. 3.5 While the revenue has tried to put up a case that the transactions were in the nature of accommodation entries, this case has only presumptive and assumptive value not supported by any factual data. On the contrary, on the

ITA Nos.69 &70/Kol/2026/AY 2020-21 Questqueen Nirmal LLP vs. ITO basis of the material before the authorities, the transactions were found to be genuine. 4. Learned advocate for the appellant attempted to emphasize that for the purpose of application of Section 68 of the Act, three ingredients were necessary. Firstly identity of the parties to the transaction of loan, second is the creditworthiness of such parties and thirdly the genuineness of the transaction. It was submitted in vain that neither of the ingredients were satisfied. 5. As discussed above, since the requisite material was furnished by assessee showing the identity and since the assessee was not beneficiary when the loan was repaid in the subsequent year, even the ingredients of creditworthiness and genuineness of transaction were well satisfied. 6. The Tribunal rightly recorded in para 29 of the judgment, "Once repayment of the loan has been established based on the documentary evidence, the credit entries cannot be looked into isolation after ignoring the debit entries despite the debit entries were carried out in the later years. Thus, in the given facts and circumstances, were hold that there is no infirmity in the order of the Ld.CIT-A. " 7. For the reasons recorded above, no question of law muchless substantial questions arises in this appeal. It stands meritless and accordingly dismissed. 7. The case of the is squarely covered by the judgements of Hon'ble Supreme Court in case of CIT v. Orissa Corporation (P.) Ltd., 159 ITR 78 (SC) wherein it has been held that where the assessee has furnished all the evidences before the authorities and authorities have not conducted any enquiry and pin pointed any defect in the said evidences, then addition cannot be made merely on the ground that letter u/s 133(6) was not responded.

ITA Nos.69 &70/Kol/2026/AY 2020-21 Questqueen Nirmal LLP vs. ITO 8. Considering, the facts of the case in the light of aforesaid judgments, we are inclined to set-aside the order of ld. CIT(A) and direct the AO to delete the addition. The ground no 2 of the appeal of the assessee is allowed.

ITA No.70/Kol/2026 (A.Y.2020-21):

The order is pronounced in the open Court on 16/07/2026.

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated: 16/07/2026 SAMANTA आदेश �ȧ ĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwarded to: 1. \ �Ȣ�ȡ�ȸ/ The Appellant 2. Ĥ×��ȸ/ The Respondent 3. Ȳ�Ȳͬ��आयकर] �ǕÈ�/ Concerned CIT 4. आयकर] �ǕÈ�(अपील) / The CIT(A)

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BY ORDER, // TRUE COPY // Asstt.Registrar, ITAT, Kolkata