ITO WARD 14(1), KOLKATA vs. SAGAR VYAPAAR PVT. LTD., KOLKATA

IN THE INCOMETAXAPPELLATE TRIBUNAL “D” BENCH, KOLKATA Before ShriRajesh Kumar, Accountant Member and ShriPradip Kumar Choubey, Judicial Member ITA No.2234/Kol/2025 Assessment Year: 2013-14 ITO Ward 14(1).,………………………….………………………….Appellant Aayakar Bhawan Poorva, Kolkata- 700107 [PAN No. AAFCS4334M] Vs. Sagar Vyapaa rpvt. Ltd.……………………..…………….………... Respondent 236, bose road sonarpur, Kolkata- 700146 Appearances by: Assessee represented by- Siddarth Agarwal Advocate, Respondent Department’s Ld. Representative. S . B. Chakraborthy , Addl. CIT, Sr., DR, Appellant. Date of concluding the hearing : April 15, 2026 Date of pronouncing the order :May 15 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the Revenue is directed against the order dated 31.03.2022 of the National Faceless Appeal Centre (NFAC) passed under Section 142(1)(c) of the Assessment Year 2013-14 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”). 2. The brief facts of the case of the assessee is that the assessee filed its return on 27.09.2013 showing a total income of Rs.9,35,670/-, Then the matter was selected for scrutiny and assessment u/s. 143(3) was completed on 11.01.2016. Thereafter, notice u/s 148 of the Income Tax Act. 1961 was allegedly issued on 31.03.2021 on the alleged ground that the assessee was the beneficiary of receipt of accommodation entry of Rs.80 lakhs from M/s. Tedium Sales Pvt. Ltd. In compliance to the notice, the assessee filed return of income on

ITA No.2234/Kol/2025 Assessment Year- 2013-14 19.04.2021 declaring a total income of Rs. 9,35,670/-. Then notices u/s. 143(2) and 142(1) were issued from time to time which had been duly complied by the assessee by filing requisite documents. Then the Ld. A.O. completed the reassessment by passing an order u/s. 147 r.w.s 144B of the Act.AO opined that that assessee received anaccommodation entry through M/s Tedium Sales in the shape of loan which was nothing but assessee's own money which has been channelize to the assessee's books of paying any tax on it. Even if the transaction has been carried through bankingchannel yet it has been carried out by proper planning to show it as genuine transactionwithout paying any penny of tax on the inaccounted money. Accordingly an addition of Rs. 80,00,000/- u/s 68 is made to the income of the assessee by holding the transaction asunexplained cash credit being bogus/accommodation entry received through bankingchannel of shell/paper companies. I am satisfied that assessee has furnished inaccurateparticulars of its income to the extent of Rs 80,00.000/-, penalty proceedings u/s 271(1)(c)are initiated separately.

Aggrieved by the said order, assessee preferred appeal before the CIT(A) wherein appeal of the assessee has been allowed by observing thus: -

1) In this case, regular scrutiny assessment of A.Y-2013-14 of assessee company was completed u/s. 143(3), in 2016, after then, on the basis of information received from Investigations Wing, that assessee has received Rs.80,00,000/- from M/S Tedium Sales Pvt. Ltd. which is the accommodation entry provider, assessment was reopened and addition was made.

2) During the course of assessment and appellate proceedings assessee has submitted that it has taken loans of Rs.80,00,000/- on commercial terms and it has been repaid also during the same A.Y along with 2

ITA No.2234/Kol/2025 Assessment Year- 2013-14 interest payment, on which TDS was also deducted. Assessee has taken this loan in parts spreading from the month of May-2012 to Aug-2012. Assessee has taken Rs.30,00,000/- on 04.05.2012 and repaid it on 10.05.2012 itself, i.e within 6 days itself. Further balance Rs.50,00,000/-loan was taken in the month of Aug-2012 and repaid in the month of Feb-2013 i.e within 6 months itself and in same financial year. Further, on 02.03.2013 interest of Rs.235973/- has been paid after deducting TDS of Rs.23597/-. From all these facts, it is clear that this loan is purely of commercial nature and has been duly repaid also within such a short span of time along with interest and TDS provisions have also been complied.

3) In support of its contention, that when unsecured loan are being repaid, then no addition u/s.68 of the Act can be made, assessee has submitted number of judicial pronouncements, which are reproduced below:

(iv)CIT vs. Ayachi Chandrashekhar Narsangji 221 Taxman 146 (Guj)

"6. Having heard Shri Pranav Desai, learned Counsel appearing on behalf of the revenue and on perusal of the order passed by the CIT(A) confirmed by the ITAT,

It appears that CIT(A) was satisfied with respect to the genuineness of the transaction and creditworthiness of Shri Ishwar Adwani and, therefore, deleted the addition of Rs. 1,45,00,000/- made by the Assessing Officer. It is required to be noted that as such an amount of Rs. 1,00,00,000/- vide cheque no. 102110 and an amount of Rs.60 lakh vide cheque no 102111 was given to the assessee and out of the total loan of Rs. 1.60 crore.

ITA No.2234/Kol/2025 Assessment Year- 2013-14 Rs. 15 lakh vide cheque no. 196107 was repaid and, therefore, an amount of Rs. 1,45,00,000/-remained outstanding to be paid to Shri Ishwar Adwani. It has also come on record that the said loan amount's been repaid by the assessee to Shri Ishwar Adwani in the immediate next financial year and the Department has accepted the repayment of loan without probing into it. In the aforesaid facts and circumstances of the case, when the ITAT we see no reason to interfere with the impugned order passed by the ITAT. No question of law, much less substantial question of law arises in the present Tax Appeal. Hence, the present Tax Appeal deserves to be dismissed and is accordingly dismissed."

(v) PCIT vs. Ambe Tradecorp (P) Ltd. 290 Taxman 471 (Guj)

"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 CIT v. Durga Prasad More [1971] 82-(TR 540 (SC)and also in Sumati Dayal v. CIT [1995] 80 Taxman 89/214 ITR 801 (SC), 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 wasrepaid 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 4

ITA No.2234/Kol/2025 Assessment Year- 2013-14 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."

(vi) Poddar Realtors vs. ITO, ITA No. 265/K/23, Order dated 22.06.23

From the above factual analysis and judicial pronouncements, it is evident that assessee company has taken this commercial loan and repaid it back. Nowhere it is proved by AO, that it has channelized its own funds through this loan. AO has simply made addition by relying on investigation wing information, without considering the details and documentary evidences submitted by assessee company. Further, Hon'ble Gujarat High Court has in case of Ojas Tarmake (P) Ltd (2023) 5

ITA No.2234/Kol/2025 Assessment Year- 2013-14 156 Taxmann.com 75 (Gujarat) 22-08-23 has upheld this view. In this case Hon'ble High Court has held as under:

Section 68 of the Income-tax Act 1961 Cash credits (Unsecured loan) Assessment year 2013-14 During assessment proceedings it was noted that assessee had shown particulars of unsecured loan received during relevant assessment year - Assessing Officer issued letters under section 133(6) on creditors of unsecured loans Thereafter, Assessing Officer made additions with respect to unsecured loan on ground that assessee failed to discharge onus of liability as laid down under section 68 On appeal, Commissioner (Appeals) upheld additions on ground that assessee failed to produce any of creditors before Assessing Officer Whether since Tribunal found on facts that amount of loan received by assessee was returned to loan party during year itself and all transactions were carried out through banking channels, no error of law was committed by Tribunal by deleting addition made under section 68- Held, yes [Paras 3 and 4] [In favour of assessee]

Since on facts, relief has been granted to assessee, hence all other legal and technical grounds becomes academic in nature and becomes infructuous and hence dismissed.

In the result the appeal of the assessee is allowed.

Being aggrieved by and dissatisfied the revenue has preferred appeal by taking following grounds:-

ITA No.2234/Kol/2025 Assessment Year- 2013-14 1. Whether on the facts and circumstances of the case, the Ld. CIT (A) is justified in deleting the addition of Rs. 80,00,000/- u/s 68 of the Income Tax Act when the assessee failed to discharge its onus to prove the genuineness of the transactions and the credit worthiness of the creditors.

ITA No.2234/Kol/2025 Assessment Year- 2013-14 repaid.The Ld. AR submits that M/s Tedium Sales Pvt. Limited have sufficient networth which is more than the loan advanced thus its creditworthiness has proved.His submission is that CIT(A) has not only discussed the documentary evidences rather considered the several judicial pronouncement and thereafter passed the impugned order.

Accordingly, appeal of the Revenue is hereby dismissed.

Kolkata, the 15th May, 2026.

Sd/ Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member 8

ITA No.2234/Kol/2025 Assessment Year- 2013-14

Dated:.. 15. 05.2026. DC, PS

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.2234/Kol/2025 Assessment Year- 2013-14