DCIT, CC-2(2), KOLKATA, KOLKATA vs. BIJAY KUMAR GARODIA, KOLKATA

ITA 514/KOL/2026Status: DisposedITAT Kolkata22 September 2026AY 2018-1916 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the appeal filed by the Revenue. Regarding the addition of Rs. 45,00,000 under Section 68, the Tribunal noted that the assessee had submitted a balance sheet, ITR acknowledgments, account confirmations, and bank statements of the lender, M/s Pioneere Saree Merchants Pvt Ltd, to prove the identity, creditworthiness, and genuineness of the transaction. The Tribunal also observed that the loan had been fully repaid by the assessee, with repayment dates provided. The Tribunal found no infirmity in the CIT(A)'s order deleting this addition, implicitly agreeing that the assessee had discharged its initial burden and the revenue had not brought sufficient material to disprove it. Consequently, the disallowance of interest of Rs. 2,16,986 was also deleted. The cross-objection filed by the assessee was dismissed as infructuous since the Revenue's appeal was dismissed.

What were the facts?

The assessee, Bijay Kumar Garodia, filed its return for AY 2018-19 declaring an income of Rs. 4,82,750. Subsequently, a search operation on Prithvi Group and its associates, including the assessee, led to a revised assessment. The Assessing Officer (AO) completed the assessment under Section 147/143(3) on March 30, 2023, with a total income of Rs. 51,99,740. This included an addition of Rs. 45,00,000 under Section 68 for alleged unsecured loans and a disallowance of Rs. 2,16,986 for interest paid on these loans under Section 37(1). The assessee appealed to the CIT(A), who allowed the appeal, deleting both additions. The Revenue (DCIT, CC-2(2)) has appealed this order to the ITAT.

What were the issues?

1. Whether the CIT(A) was correct in deleting the addition of Rs. 45,00,000 pertaining to unsecured loans, when the assessee allegedly failed to prove the creditworthiness and genuineness of the loan transaction with a shell entity controlled by accommodation entry operators (Section 68)? - Assessee's contention: The assessee discharged its initial onus by providing documentary evidence, including ITRs, ledger accounts, loan confirmations, and bank statements of the lender, whose net worth exceeded Rs. 13 crores. The AO failed to disprove the genuineness. - Revenue's contention: The CIT(A) erred by relying on routine confirmations and banking transactions, ignoring the Investigation Wing's findings, the AO's assessment, statements of accommodation entry operators recorded under Section 131/132(4), and the financial credibility of the lender, which indicated the assessee routed its own unaccounted money. 2. Whether the CIT(A) was correct in deleting the addition of Rs. 2,16,986 for interest expenses claimed on unsecured loans from a shell company (Section 37(1))? - Assessee's contention: The interest was paid on loans taken in earlier years, and the ledger copies show these payments. The addition is unsustainable. - Revenue's contention: Similar to issue 1, the loans were from shell companies, making the interest disallowance deletion incorrect. 3. Whether the CIT(A) was justified in accepting unverified submissions without conducting specific inquiries, despite having the power under Section 250(4)? - Revenue's contention: The CIT(A) failed to exercise his inherent power to conduct inquiries or direct the AO to do so, leading to the acceptance of unverified submissions.

Which sections of the Income-tax Act were involved?

Section 68,Section 37(1),Section 147,Section 143(3),Section 132,Section 148,Section 133(6),Section 131,Section 132(4),Section 250(4)

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

I.T.A. No.514/KOL/2026
C.O No.36/KOL/2026

Read from the judgment's own cause title. This page is filed under one of them.

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member Assessment Year: 2018-19 DCIT, CC-2(2)...........................…....……….……………….…………...... Appellant Office of the DCIT, CC-2(2), Kolkata, Aayakar Bhawan Poorva, 4th Floor, 110 Shantipally, E.M. Bypass, Kolkata- 700107 vs.

Bijay Kumar Garodia........................…………………………………....Respondent CF 361, Salt Lake City Kolkata, 700064, West Bengal, Kolkata [PAN: ACCPG4986F] C.O No.36/KOL/2026 (in I.T.A. No. 514/KOL/2026)

Assessment Year: 2018-19 Bijay Kumar Garodia………….....………………..............................Cross-Objector CF 361, Salt Lake City Kolkata, 700064, West Bengal, Kolkata [PAN: ACCPG4986F] vs. DCIT, CC-2(2)..........................…………………….…..….......……...…..Appellant Office of the DCIT, CC-2(2), Kolkata, Aayakar Bhawan Poorva, 4th Floor, 110 Shantipally, E.M. Bypass, Kolkata- 700107 Appearances by: Shri P.J. Bhide, FCA, appeared on behalf of the appellant.

Shri Sandip Mandal, Sr. DR, appeared on behalf of the Respondent.

Date of concluding the hearing : 11August, 2026 Date of pronouncing the order : S

The order continues below.

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