DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(3), KOLKATA, KOLKATA vs. JALAN SILVER GARDEN PRIVATE LIMITED, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

ITA No. 3053/KOL/2025 Assessment Year : 2018-2019

Deputy Commissioner of Vs. Jalan Silver Garden Income, Central Circle 1(3), Private Limited, Kolkata, 1st Floor, 52, Manohar Aayakar Bhawan Poorva, 3rd Das Street, Burrabazar, Floor, 110, Shantipally, Kolkata - 700007 Kolkata - 700107 [PAN: AABCJ0444P]

APPELLANT RESPONDENT

Assessee by : J.M. Thard, Adv. Revenue by : Sanjit Kumar Das, CIT-DR

Date of hearing : 16.06.2026 Date of Pronouncement : 07.07.2026

O R D E R This is an appeal filed by the Revenue against the order passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the Ld. Commissioner of Income Tax (Appeals)-Kolkata-20 (hereinafter referred to as “the Ld. CIT(A)] dated 25.07.2025, DIN & order No. ITBA/APL/S/250/2025-26/1078910284(1) on the following grounds of appeal:

“1. That on the facts and circumstances of this case, whether the Ld. CIT(A) is correct in deleting the addition of Rs.25,00,000/-made under section 68 of the Income-Tax Act, 1961, on account of unexplained cash credits

2 ITA No. 3053/KOL/2025 Jalan Silver Garden Private Limited received through shell entity namely M/s. Angitia Plaza Private Limited in the guise of unsecured loan. 2. That on the facts and in the circumstances of this case and in law, whether the Ld. CIT(A) was justified in relying merely on routine confirmations and banking channel transactions, while ignoring the findings of the Investigation Wing and the Assessing Officer, Statement of the accommodation entry operator, financial credibility of the creditor and other surrounding facts, which clearly established that the assessee had routed its own unaccounted money through accommodation entries. 3. That on the facts and circumstances of this case and in law, whether the Ld. CIT(A) is correct in accepting the unverified submission of the assessee, even though under section 250(4) of the Act, the Ld. CIT(A) has the inherent power to conduct such enquiries himself OR direct the AO to do so in order to establish the finality of facts before deciding the appeal. 4. For that the monetary limit for filing appeal before the Honourable ITAT as prescribed by the CBDT Circular No.09/2024 is not applicable in the present case as the case pertains to accommodation entries and falls under the exceptional clause in para 3.1(h) of the CBDT Circular No.05/2024. 5. That the appellant craves leave to add, to and/OR alter, amend, modify OR rescind the grounds hereinabove before OR at the time of hearing of this appeal.” 2. Briefly stated the facts of the case are that the assessee is engaged in the business of manufacturing of jewellery and wholesale of the products filed return of income on 10.10.2018 declaring at income of Rs. 6,24,340/-. Subsequently, the case was selected for scrutiny under compulsory scrutiny for the reason that the search and survey operation in the case of Banka Group of cases was conducted on 21.05.2018, wherein Shri Mukesh Banka in his statement recorded as admitted to have provide various bogus entities to provide accommodation entries. On verification of bank account of paper/shell company of Shri Mukesh Banka various beneficiaries of accommodation entries were identified. On verification of data provided by the Investigation Wing, it has been noticed that Angitia Plaza Pvt. Ltd. one of the paper/shell company

3 ITA No. 3053/KOL/2025 Jalan Silver Garden Private Limited controlled and managed by Shri Mukesh Bank. On perusal of bank statement of Angitia Plaza Pvt. Ltd. A/c No. 0344201700258 in Canara Bank, it was found that the amount of Rs. 25 lacs has been transferred to the bank account of the assessee company on 02.06.2017. Accordingly, notice u/s 143(2) of the Act dated 27.09.2019 and other statutory notices were issued to the assessee. The assessee furnished reply and response dated 30.03.2021 and 31.03.2021 which was examined and as per notice u/s 142(1) of the Act dated 23.03.2021, the assessee was specifically asked to furnish documentary evidence to prove the identity and creditworthiness of loan creditor and genuineness of the transaction. In response to the assessee furnished confirmation. from ANGITIA PLAZA PVT. LTD. and confirmed copies of ledge account of the above loan creditor in its books. The Assessee submitted that there is regular business transactions vide submission dated 30.03.2021. Further, there is no documentary evidence as identity and creditworthiness of the loan creditor and genuineness of the transaction under with this party has been furnished. In the absence of any documentary evidence as the assessee failed to establish the necessary ingredients of section 68 of the Act the amount was treated as unexplained cash credit. Further, on perusal of bank statement of M/s Angitia Plaza Pvt. Ltd. it has been noticed that there have been credits from other parties which are transferred to other persons as unexplained loan are advance even earmark balance in the account of closing balance

4 ITA No. 3053/KOL/2025 Jalan Silver Garden Private Limited in bank account on 31.03.2018 is only Rs. 1,11,001/- and it was observed that M/s Angitia Plaza Pvt. Ltd. is providing accommodation entries and it was observed that Angitia Plaza Pvt. Ltd. is a paper/shell company narrated by Shri Mukesh Banka for the purpose of providing accommodation entries and companies not being in actual business. Accordingly, loan taken of Rs. 25 lacs claimed to be received by the assessee company from Angitia Plaza Pvt. Ltd. is nothing but unaccounted income of the assessee company routed back to it in the form of unsecured loan therefore, the same was treated as unexplained cash credit within the purview of section 68 of the I T act and added to the income of the assessee for AY 2018-19 cash credit u/s 68 of the Act at Rs. 25 lacs.

“5.1 I have duly considered the fact of the case, submission filed by the appellant and the assessment Order. In the assessment stage, the Assessing Officer has noticed that the assessee has taken unsecured loan, amounting to Rs.25,00,000/- from M/s Angita Plaza Pvt. Ltd. During the year under consideration, the Balance Sheet of the lender company was examined by the AO. The AO has noticed that the lender company has no tangible and intangible asset and the company has meager profit. After considering the statement of Shri Mukesh Banka, the AO assumed that the lender company is a shell company and added Rs. 25,00,000/- to the total income of assessee. In appeal stage, the appellant has stated that the appellant had taken Unsecured Loan of Rs.25,00,000/- from M/s Angitia Plaza Private Limited on 02/06/2017 through RTGS from Bank Account with Canara Bank, Brabourne Road Branch, Kolkata. The Loan was repaid through banking channel in the subsequent years in the following manner: • On 26/11/2018 Rs.13,00,000/-

5 ITA No. 3053/KOL/2025 Jalan Silver Garden Private Limited • On 27/05/2019 Rs. 4,00,000/- • On 11/07/2019 Rs. 8,00,000/- In support of its claim, the appellant has furnished copy of bank statement reflecting transaction, P& L account, Balance Sheet, Confirmed copy of ledger account and source of fund of loan creditor. The appellant has also pointed out that the Assessing officer has only disallowed unsecured loan and not the interest claimed by the assessee. 5.2 Decision: As the appellant has stipulated that the loan taken of Rs.25,00,000/- from M/s Angita Plaza Pvt. Ltd. was refunded to the party in subsequent years through the proper banking channel. Further, the appellant assessee has paid interest to the said party on the amount of loan taken by it in that period. Further, it is also pertinent to mention here that the AO himself stated that the assessee furnished copy of PAN Card, P & L account, Balance Sheet, Confirmed copy of ledger account, source of fund of loan creditor and bank statement showing transaction in assessment stage.Further, the AO has not brought out any cogent material to suggest that the said loans arebogus in nature. Furthermore, the Hon’ble Gujarat High Court in case of CIT Vs Ayacha Chandrashekhar Narsangji [2014] 42 Taxmann.com 251 has held that when the taxpayer has refunded the amount of loan to the party, therefore no addition of such loan can be made u/s 68 of the Act. Hence, considering the fact of the case and the decision of Hon’ble Gujarat High Court in the case of Hon’ble Gujarat High Court in case of CIT Vs Ayacha Chandrashekhar Narsangji [2014] 42 Taxmann.com 251[Supra], I find the addition made by the AO of Rs.25,00,000/- u/s 68 of the Act is devoid of merit and untenable in the eyes of law. Hence, the addition of Rs.25,00,000/- is deleted.” 4. Aggrieved from the above order, the Revenue filed appeal before the ITAT with a delay of 72 days which is condoned. The Ld. DR relied on the order of AO and submitted that M/s Angitia Plaza Pvt. Ltd. is a shell company and there is no creditworthiness of the lender, the Ld.CIT(A) has ignored the finding of Investigation Wing statement of Shri Mukesh Banka in which he clearly accepted that the company floated by him are using for the purpose of giving bogus loans in the form of accommodation entry. He further submitted that the Ld.CIT(A) has given direction to the AO whereas he inherent power u/s 250(4) of the Act but he did not do. He further submitted that the creditworthiness should be seen at the time of taking loan. On perusal of the bank statement of the lender

6 ITA No. 3053/KOL/2025 Jalan Silver Garden Private Limited company, there is huge transactions and credit in the bank statement and amount is withdrawn immediately after credit in its bank account leaving small balance which shows that the lender company has no any creditworthiness and no any business activity merely it is involved in providing accommodation entry in the value of commission.

7 ITA No. 3053/KOL/2025 Jalan Silver Garden Private Limited Subsequently, the loan amount was repaid (supra) and details of Angitia Plaza Pvt. Ltd. was provided to the AO like financial statements, PAN, copy of income tax return and confirmation and completion of accounts from 01.04.2018 to 31.03.2019 and 01.04.2019 to 31.03.2020, where, it is clearly shows that the assessee has paid interest and return the loan taken it clearly indicates that the assessee is not the beneficiary of the any amount as alleged to the assessee. However, the AO has made addition, the Ld.CIT(A) relied on the judgment of Hon’ble Gujarat High Court noted supra on similar issue.

“15. The petitioner received Rs.50,00,000/- from the Mehta Finance on 20th March, 2015 and Rs.75,00,000/- on 23rd March, 2015, which was NEUTRAL CITATION C/SCA/4200/2023 ORDER DATED: 05/08/2025 undefined returned on 23rd March, 2015 itself, whereas Rs.50,00,000/- was returned on 24th March, 2015 as is evident from the confirmation ledger account of the petitioner from the books of the Mehta Finance filed by the petitioner along with the

8 ITA No. 3053/KOL/2025 Jalan Silver Garden Private Limited acknowledgment of the income tax return filed by the said Mehta Finance with a reply to show that the petitioner has entered into a genuine temporary loan transaction through banking channel. The respondent - Assessing Officer, however, failed to consider such documents on record and has jumped to the conclusion that the petitioner is one of the beneficiaries, who has availed / obtained accommodation entries by way of the banking channel against cash to the tune of Rs.1,25,00,000/- without there being any supporting, independent, tangible material in possession of the Assessing Officer. It is, therefore, evident that the notice issued under Section 148 of the Act for reopening as well as the order passed under Section 148A(d) of the Act are on the basis of the inference drawn pursuant to the search, which had taken place on 30 th July, 2018 in case of Mehta Sony Group.” 8. The Ld. Counsel also relied on the following judgment which support the case of the assessee.

Order pronounced on 07.07.2026. Sd/- (Laxmi Prasad Sahu) Accountant Member Dated: 07.07.2026 AK, Sr. P.S.

9 ITA No. 3053/KOL/2025 Jalan Silver Garden Private Limited

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

//True copy// By order

Assistant Registrar, Kolkata Benches