DCIT, CC-1(4), KOLKATA, KOLKATA vs. PRABHU SHANKER AGARWAL, KOLKATA

Per Rajesh Kumar, AM:

This is an appeal preferred by the Revenue against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 22.01.2025 for the AY 2001-02.

3.1. The facts in brief are that during the course of assessment proceedings, the ld. AO noted that the assessee was not maintaining any books of account. The AO observed on the basis of incriminating document, PSA/1, page no. 24 and 25, that the assessee has invested on advancing loans to different parties aggregating to ₹38.00 lacs which was not disclosed by the assessee. The ld. AO noted that since the assessee has not provided peak, therefore it could not be ascertained whether the said loans were refunded. Consequently, the entire amount of cash loans was added as undisclosed investment out undisclosed income to the income of the assessee.

3.2. In the appellate proceedings, the ld. CIT (A) deleted the addition by observing and holding as under:-

“Thus, it has already been held that the entries in the name of MAA belongs to mother of the assessee and cannot be added in the hands of the assessee. I further found that the Ld. ITAT has deleted the addition of Rs. 15,50,000/- for FY 2001-02, Rs. 16,00,000/- for FY 2000-01 and 50,00,000/- for FY 1996-97 on account of investments which also stood in the name of mother. I find that in the process the Ld. ITAT has also made observations with regard to seized paper PSA/1 page 25 in which it is clearly stated that the said paper also belonged to the mother of the assessee. I further find that in the details of investment in PSA/1 page 25, there are names of P K Kothari, Jhawar Trading, Eastern Confectionery Bharati Eng co. which names also appeared in another seized paper HR/28 at page 3 to 7 for which additions have been separately made. The said addition is disputed by the assessee vide ground no. 5. In the said details of investment also the name of mother KDA is clearly found by the AO himself. Thus, there cannot be any dispute that the said investment belonged to mother of the assessee Smt K D Agarwal. I also find that the investment of Rs. 38 lakhs in the name of mother were appearing in FY 2001-02 whereas higher peak investment ofRs.50 lakhs by way of loan was made in FY 199697 by the mother which was deleted by the

4.1. The facts in brief are that during the assessment proceedings, the ld. AO found on the basis of document that there were some entries of loans mentioned therein. The assessee submitted before the ld. AO that these loans were of two types , one loan which originated during block period and, second, which originated beyond the block period. However, the ld. AO brushed aside the contention of the assessee and came to the conclusion that all the entries were originating within the block period. Consequently , after issuing a show cause notice, the total amount of loans of

4.2. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee by observing and holding as under:-

“Ground no. 5: In this ground the assessee has disputed the addition of Rs. 1,91,50,000/- from seized paper HR 28 page 3 to 7 vide page 11 and 12 of the original assessment order. I find that there was investment in the name of various parties in this page. I have also looked into the seized papers. I find HR/28 is ledger account of various borrowers. As contended by the assessee, I find that the borrowers also include the name Navin Udyog, G Poddar & Sons (HUF), Jhawar Trading co., Promod Kothari, Bharti Eng Works Easter Confectionery, Arvind Khaitan and Unic Pen store, which belonged to KDA (mother of the assessee). The total amount of which 20,00,000/. Furthermore, the entry in the name of Jhawar Trading co., Promod Kothari, Bharti Eng Works Easter Confectionery also appeared in PSA/1 page 25 vide page 9 of the assessment order which paper have been held to belong to KDA mother of the asseessee. Therefore, the addition of Rs.20,00,000/- is deleted. Further the entry in the name of Arvind Khaitan Rs. 1,50,000/- and Martin Rs. 4,00,000/- also appeared in page HR/27. Thus, this sum is double addition and is deleted. Further from HR/28 page 3/7 of the seized documents it is evident that the investment in Rukka is made for 1 to 7 months . The Rukka (confirmation of loan given) cannot continue for years This can also be seen from page 15/18/20 of PSA/1 as well as from HR/28 page 4. The highest peak of Rukka in one particular year is 53,50,000/- in F Y 1997-98. Therefore, the highest investment in a given year which was available for rotation can be taken at Rs. 53,50,000/- and maximum amount of investment that can be added will be Rs. 53,50 000/-. In view of the above out of the remaining 1,70,25,000/- only Rs. 53,50,000/- can be considered as peak investment as directed by the Ld. ITAT. It is also found that the assessee has made voluntary disclosure of Rs. 44,73,870/- from HR/27 and HR/28. Out of this Rs. 4,54,000/- related to HR/28 Rs. 40,19.770/- related to HR/27. The total disclosure from the two pages was Rs. 44,73,870/- as appears from the computation of Income a copy of which was filed. This disclosed income was duly shown in the return. Thus, out of Rs. 53,75,000/- the said disclosed sum of Rs. 4,54,000/- is also deleted and addition to the extent of Rs. 49,21,000/-is confirmed.” 4.3. We observe from the order of the ld. CIT (A) that there were investments in the names of various parties. We note that the seized paper marked as HR/28 was a ledger account of various borrowers. We note that the ld. CIT (A) has recorded a finding that these entries were belonging to the mother of the assessee to the tune of ₹20 lacs

Order pronounced in the open court on 16.04.2026.

Sd/-/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 16.04.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata