KEDIA CARBON PVT. LTD.,KOLKATA vs. D.C.I.T., CC - 4(3), KOLKATA

ITSSA 26/KOL/2026Status: DisposedITAT Kolkata16 September 2026AY 2015-20166 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that for AY 2010-11, since the assessment year was unabated at the time of search, additions under Section 153A could only be made on the basis of seized incriminating material. As neither the AO nor the CIT(A) referred to any seized material, and the AO's basis was merely perusal of bank and audited accounts, the addition was not supported by any seized documents. Therefore, the assessment was considered bad in law and without jurisdiction. The order of the CIT(A) was set aside, directing the AO to delete the addition. For AY 2014-15, the issue was similar to AY 2010-11, and the appeal was allowed accordingly. For AY 2015-16, the Tribunal found that the assessee had furnished all documentary evidence regarding share subscribers, including their ITRs and bank statements. While summons under Section 131 were not complied with by two parties, the Tribunal held that if the assessee provided all evidence and the AO did not conduct further inquiry or point out defects, additions cannot be made solely on the ground of non-compliance with summons. Following the cited precedents, the Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.

What were the facts?

The assessee, Kedia Carbon Pvt. Ltd., engaged in manufacturing coal tar pitch and its by-products, filed appeals against orders of the CIT(A)-27, Kolkata, for Assessment Years (AY) 2010-11, 2014-15, and 2015-16. These appeals stemmed from additions made by the Assessing Officer (AO) and confirmed by the CIT(A). For AY 2010-11, the AO added Rs. 50,00,000/- as unexplained cash credit for share application money and Rs. 10,00,000/- for unsecured loans. For AY 2015-16, the AO added Rs. 56,92,560/- representing share application money. The additions were made following a search under Section 132(1) and survey under Section 133A. The AO's basis for additions was inadequate compliance to summons issued under Section 131 to lenders and share subscribers, despite the assessee providing audited accounts, ITRs, and bank statements.

What were the issues?

1. Whether, in an unabated assessment year where a search under Section 132(1) has occurred, additions can be made under Section 153A without any incriminating material seized during the search? (Question of law) 2. Whether share application money and unsecured loans received by the assessee can be treated as unexplained cash credit under Section 68 solely on the ground of non-compliance with summons issued under Section 131, when the assessee has furnished documentary evidence like ITRs and bank statements of the creditors/subscribers? (Question of mixed law and fact) Assessee's Contentions: For AY 2010-11, the assessee argued that additions under Section 153A are permissible only if based on incriminating material seized during the search, which was absent. For AY 2015-16, the assessee contended that providing all documentary evidence (ITRs, bank statements) should suffice to prove genuineness and creditworthiness, and additions cannot be made solely due to non-compliance with Section 131 summons if the AO conducted no further inquiry or pointed out defects. The assessee relied on CIT vs. Orissa Corporation Pvt. Ltd. (1986) 159 ITR 78 (SC), CIT vs. Orchid Industries Ltd. (2015) 397 ITR 136 (Bom), Crystal Networks Pvt. Ltd. vs. CIT (2014) 353 ITR 171 (Kol), ITO vs. M/s. Cygnus Developers India Pvt. Ltd. (ITA No. 282/Kol/2012), and Joy Consolidated Pvt. Ltd. vs. ITO (ITA No. 547/Kol/2020). Revenue's Contentions: The judgment does not record specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

Section 132,Section 133A,Section 153A,Section 143(2),Section 142(1),Section 131,Section 68,Section 11UA

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH: KOLKATA

Before: Shri Rajesh Kumar & Shri Pradip Kumar Choubey]

Per Rajesh Kumar, AM: These are the appeals preferred by the assessee against the separate orders of the Ld. Commissioner of Income Tax (Appeals)-27, Kolkata (hereinafter referred to as the “Ld. CIT(A)”] dated 05.01.2026 and 04.02.2026 for the AY 2010-11, 2014-15 and 2015-16 respectively. First we shall adjudicate in IT(S.S)A No. 24/Kol/2026 for AY 2010-11. 2. Issue raised in ground no. 1 is against the order of Ld. CIT(A) confirming the addition made by the

The order continues below.

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