GITCO VINCOM PRIVATE LIMITED,KOLKATA vs. DCIT/ACIT, CIRCLE 7(1),, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.766/KOL/2026 (Assessment Year:2017-18) Gitco Vincom Private Limited, DCIT/ACIT, 4th Floor, Room No.407, Krishna Vs. Circle – 7(1), Building, 224 A.J.C. Bose Road, Kolkata Minto Park, Kolkata – 700017, West Bengal [PAN:AABCG1460A] (Appellant) .. (Respondent) Appellant by : Shri Giridhar Dhelia, AR Respondent by: Shri Manas Mondal, CIT-DR Date of Hearing 11.06.2026 Date of Pronouncement 03.07.2026

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

This appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, (hereinafter referred to as the “Ld.CIT(A)”], dated 11.02.2026 for the Assessment Year (AY) 2017-18.

“8. That the Ld. AO erred in making addition of Rs.3,95,92,096/- under section 68 read with section 115BB treating genuine loan taken by the

ITA No.766/Kol/2026/AY 2017-18 Gitco Vincom Pvt. Ltd. Appellant as unexplained cash credit which in fact repaid subsequently along with interest and deduction of TDS under the provisions of Income Tax Act. 10. That the Ld. AO erred in disallowing interest of Rs.23,86,400/- under section 37 of the Income Tax Act, 1961, which is wholly consequential to the loan transaction and allowable as business expenditure, therefore, once loan is held genuine, interest paid thereon cannot be disallowed. 11. That the Ld. AO erred in making addition of Rs.5,93,81/- under section 69C alleging commission payment without any material, evidence or corroboration therefore, the said addition is purely conjectural and arbitrary and hence to be deleted.” 3. The facts of the case in brief are that the assessee is a NBFC companies, duly registered with the Reserve Bank of India (RBI) and is engaged in the business of financing. During the impugned assessment year, the assessee filed the return of income on 31.10.2017, declaring total loss of Rs.28,40,413/-. The said return was revised on 29.05.2018, declaring total loss of Rs.28,40,413/-. Thereafter, the Assessing Officer (In short, ‘AO’) on the basis of information in the Insight Portal under High-Risk Transactions, re- opened the case of the assessee. The AO issued show cause notice u/s 148A(b) of the Act, which was duly replied by assessee. The AO passed order u/s 148A(d) of the Act on 30.03.2024 after taking into account the reply of the assessee. The notice u/s 148 of the Act also issued on 30.03.2024 after obtaining the approval of the competent authority. The case of the assessee was re-opened on the ground that the assessee has taken loan amounting to Rs.3,70,00,000/- in various entities through M/s Konark Towers Pvt. Ltd. and others Group entities. Accordingly, the assessee was furnished the details/evidences qua the loan creditors, comprising names, addresses, ITRs, audited financial statements, bank statements, loan confirmation certificates showing loan transactions and repayment of loan in respect of all the five loan creditors. All these companies were non-banking finance companies, from

ITA No.766/Kol/2026/AY 2017-18 Gitco Vincom Pvt. Ltd. whom the assessee had taken aggregate loan of Rs.3,70,00,000/-. The assessee also entered into the transactions with M/s KPJ Infracom Pvt. Ltd. of Rs.25,93,205/-. In order to verify the transactions, the AO issued notices u/s 133(6) of the Act to all the loan creditors, which were duly responded by them with all documents/evidences evidencing the loan repayments. However, the AO without carry any enquiry into the evidences furnished by the assessee came to the conclusion that the assessee has failed to prove the genuineness and creditworthiness of the lenders and treated the aggregate loan amount of Rs.3,95,92,0496/- taken by the assessee as unexplained cash credit u/s 68 of the Act and added to the same to the income of the assessee. Besides, the AO also disallowed interest payment/paid of Rs.23,86,400/- on these loans u/s 37 of the Act and also estimated the commission paid for arranging these loans @1.5% on the total amount of loans which comes to Rs.5,93,881/- and the same were added to the total income of assessee in the assessment framed u/s 147/144 r.w.s. 144B of the Act on 10.03.2025.

ITA No.766/Kol/2026/AY 2017-18 Gitco Vincom Pvt. Ltd. 5. After hearing the rival parties and perusing the material on record, we find that the assessee is a non-banking financial company and engaged in the financial activities. We observe that the assessee borrowed money from various NBFCs during the instant financial year. In other words, the assessee borrowed money aggregating to Rs.3,95,92,096/- from nine entities, which were also NBFCs. The assessee filed complete details of transactions with loan creditors comprising names, addresses, ITRs, audited balance sheets, bank statements, loan confirmations showing the transactions and showing repayments, MAC master data etc. However, the AO believed the theory as contained in the investigation report that these were shell companies without knowing the factual matrix that these companies were doing business of financing and have their own resources to lend the money to assessee company. The table showing the net worth of the loan creditors is as under:

ITA No.766/Kol/2026/AY 2017-18 Gitco Vincom Pvt. Ltd. transactions. The AO has not done any enquires into the transaction / evidences. The Ld. CIT(A), in the appellate order, simply affirmed the order of AO. In our opinion, if assessee has filed all the evidences and even the letters issued by AO u/s 133(6) of the Act were responded by the loan creditors, then no addition could be made u/s 68 of the Act. In the present case, the loans taken by the assessee, have been repaid subsequently. The table showing the repayments of loans is extracted below:

ITA No.766/Kol/2026/AY 2017-18 Gitco Vincom Pvt. Ltd. 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. 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

ITA No.766/Kol/2026/AY 2017-18 Gitco Vincom Pvt. Ltd. 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 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 much less substantial questions arises in this appeal. It stands meritless and accordingly dismissed.” 8. In view of the facts of the assessee and the ratio laid down in the above decisions by the various High Courts including the jurisdictional High Court, we

ITA No.766/Kol/2026/AY 2017-18 Gitco Vincom Pvt. Ltd. set aside the order of Ld. CIT(A) and direct the AO to delete the addition. Ground Nos.8, 10 and 11 are allowed.

The order is pronounced in the open Court on 03/07/2026.

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIAL MEMBER ACOUNTNAT MEMBER

Kolkata, Dated: 03/07/2026 SAMANTA आदेश �ȧĤ Ǔ�ͧ �ͪ �\ 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)- 5. ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, आयकर\ �Ȣ�ȣ�\ͬ ����,/ DR, ITAT, Kolkata 6. �ȡ�[�ȡ_�/ Guard file.

BY ORDER, // TRUE COPY //

Asstt.Registrar, ITAT, Kolkata