D.C.I.T., CC - 3(1), KOLKATA vs. GOLDEN STAR HOTEL AND RESORTS PRIVATE LIMITED, KOLKATA

ITSSA 108/KOL/2025Status: DisposedITAT Kolkata08 July 2026AY 2015-168 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 1,09,00,000/- made under Section 68 as unexplained cash credit was not sustainable. The Tribunal noted that the Assessing Officer (AO) made the addition based on post-search inquiries without referring to any specific incriminating documents unearthed during the search and seizure operation. The CIT(A) had observed that while documents were seized, the assessment order did not mention them, and the entire addition was based on post-search inquiries. The Tribunal relied on the Supreme Court's decision in PCIT vs. Abhisar Buildwell P. Ltd., which held that in cases of unabated assessments where no incriminating material was unearthed during the search, the AO cannot assess or reassess based on other materials. The Tribunal found no illegality in the CIT(A)'s order and dismissed the Revenue's appeals. The issue of whether the assessment year 2015-16 was unabated was considered, and the Tribunal noted the AO's failure to provide incriminating documents. The Tribunal did not specifically address the Revenue's argument regarding the entry operator's statement or the applicability of CBDT Circular No. 05/2024.

What were the facts?

The Revenue (DCIT) has filed three appeals against the orders of the CIT(A) for Assessment Years 2015-16 to 2017-18. The assessee, Golden Star Hotel and Resorts Private Limited, had its return for AY 2015-16 processed under Section 143(1). A search under Section 132 was conducted on 03.01.2019 against the 'Lundia Group', to which the assessee belongs. Consequently, a notice under Section 153A was issued, and the assessment for AY 2015-16 was completed on 23.04.2021, with an addition of Rs. 1,09,00,000/- as unexplained cash credit under Section 68. The CIT(A) allowed the assessee's appeal, leading to the present appeals by the Revenue.

What were the issues?

1. Whether, on the facts and in the circumstances, the CIT(A) erred in deleting the addition of Rs. 1,09,00,000/- made under Section 68 as unexplained cash credit from shell entities, when independent corroborative evidence, including the statement of an entry operator recorded under Section 131, was available to substantiate accommodation entries. (Revenue's contention: The CIT(A) failed to appreciate that the entry operator's statement constituted valid evidence, corroborated by inquiries about the lender entities' lack of creditworthiness and genuineness. The Revenue argued that the CIT(A) erred in relying solely on the Supreme Court decision in Abhisar Buildwell (P) Ltd. and restricting itself to search-related material, contrary to judicial pronouncements allowing the use of all available material, including Section 131 statements. The Revenue also contended that the case falls under exceptional clause (h) of CBDT Circular No. 05/2024, as the assessee took accommodation entries to bring back unaccounted income.) 2. Whether, on the facts and in the circumstances, the CIT(A) erred in deleting the addition of Rs. 1,09,00,000/- made under Section 68 as unexplained cash credit from shell entities, despite the assessment year being unabated and the addition being made based on post-search inquiries, without relying on specific incriminating material unearthed during the search. (Assessee's contention, as supported by the Tribunal's findings: The addition was unlawful and made in disregard of judgments, as the assessment for AY 2015-16 had not abated. No incriminating documents were unearthed during the search, and additions cannot be made based on other materials. The CIT(A) correctly considered seized documents and followed the judgment in PCIT vs. Abhisar Buildwell P. Ltd.)

Which sections of the Income-tax Act were involved?

Section 139(1),Section 143(1),Section 132,Section 153A,Section 68,Section 142(1),Section 131,Section 147,Section 148,Section 150,Section 149,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA

Before: SHRI RAJESH KUMAR & SHRI PRADIP KUMAR CHOUBEY

For Appellant: Shri Sanjit Kumar Das, CIT-DR
For Respondent: Shri Siddharth Agarwal, Advocate
Hearing: 24.06.2026Pronounced: 08.07.2026

PER PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER:

These three appeals filed by the revenue are directed against the orders dated 20.08.2025 of the learned Commissioner of Income-tax (Appeals), Kolkata-21 (hereinafter referred to as the “ld. CIT(A)”) passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment years (A.Y.) 2015-16 to 2017-18 respectively. In all these appeals, the facts are common and grounds of appeals raised by the assessee are also similar.

Hence all appeals are clubbed and heard together and are decided by the consolidated order for sake of convenien

The order continues below.

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