PUSHKAR TRADELINK PVT. LTD.,KOLKATA vs. D.C.I.T., CENTRAL CIRCLE - 4(1), KOLKATA

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ITSSA 139/KOL/2024Status: DisposedITAT Kolkata28 October 2025AY 2013-20148 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition made under Section 68 of the Act is unjustified and illegal and accordingly deleted the same. The reasoning was based on the fact that the loan of Rs. 2,45,00,000/- from M/s Victor Tradelink Pvt. Ltd. was repaid in subsequent years, as evidenced by a chart provided by the assessee and bank statements. The loan was received via account payee cheques, interest was paid with TDS deducted, the lenders were regular income tax assessees with PANs on record, and the lenders had sufficient balance in their accounts. The Tribunal found force in the assessee's arguments, particularly referencing the Supreme Court's decision in ITO Vs Kayathwal Estate(P) Ltd. This decision held that if an assessee has disclosed fully and truly material facts with respect to a loan transaction, including repayment with interest and TDS, and the AO accepted the transaction during scrutiny assessment, then reopening after four years is unjustified if the conditions precedent for exercising power under Section 147 are not satisfied. The Tribunal concluded that the addition was made without jurisdiction and was invalid. Consequently, the appeal of the assessee in IT(SS) 139/Kol/2024 succeeded on legal grounds as well as on merits. The same findings were applied mutatis mutandis to IT(SS)A No.140/Kol/2024. The operative direction was the deletion of the addition.

What were the facts?

The assessee, Pushkar Tradelink Pvt. Ltd., filed appeals for Assessment Years 2013-14 and 2014-15 against orders of the CIT(A)-27, Kolkata, dated 17.07.2025, passed under Section 250 of the Income Tax Act. The appeals were filed with a delay of 60 days, which was condoned by the Tribunal. A search and seizure operation was conducted on the assessee on 30.07.2018. Subsequently, a notice under Section 153C of the Act was issued, and the assessee filed a revised return for AY 2013-14 at Rs. 6,94,560/-. The Assessing Officer (AO) passed an assessment order under Section 153C on 19.07.2021, determining total income at Rs. 23,44,560/-. The AO made an addition of Rs. 16,50,000/- on account of unexplained cash credit (unsecured loan) from M/s Victor Tradelinks Pvt. Ltd. The CIT(A) confirmed this addition. The assessee is in appeal before the Tribunal.

What were the issues?

1. Whether the addition of Rs. 16,50,000/- as unexplained cash credit under Section 68 of the Income Tax Act, 1961, is justified, considering that the loan was received by account payee cheque, interest was paid with TDS, the lender was a regular assessee with PAN, and the loan was repaid in subsequent years. Assessee's Contentions: - The addition is unjustified as the assessment was completed on the date of search in view of the 2nd Proviso to Section 153A of the Act, and the notice under Section 143(2) is time-barred where no incriminating material was found. - The loan taken from M/s Victor Tradelinks Pvt. Ltd. was Rs. 2,45,00,000/-, and it was repaid in the same and subsequent years, but the addition was made only for Rs. 16,50,000/-. - Relied on decisions in ITO Vs Kayathwal Estate(P) Ltd, DCIT Vs Dailmer Industries Pvt. Ltd, ITO vs. Best Cybercity (P) Ltd., PCIT vs. Ambe Tradecorp (P) Ltd., and DCIT vs. Rohini Builders. Revenue's Contentions: - The learned DR supported the impugned order of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 250,Section 139,Section 132,Section 127,Section 153C,Section 143(2),Section 142(1),Section 68,Section 153A,Section 148,Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH KOLKATA

Before: Shri Rajesh Kumar & Shri Pradip Kumar Choubey

आयकर अपील�य अ�धकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member IT(SS).A Nos.139 & 140/Kol/2024 Assessment Years: 2013-14 & 2014-15 Pushkar Tradelink Pvt. Ltd …………..…………………………….…….……Appellant Room NO.5/2, 5th Floor, 19, Pullock Street, W.B. 700038. [PAN: AAECP9517A] vs. DCIT, Central Circle-4(1), Kolkata …………..………………...……...…..…..Respondent Appearances by: Shri Soumitra Choudhury, Advocate & Pranabesh Sarkar, Adv., appeared on behalf of the appellant. Shri Rana Sengupta, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : September 03, 2025 Date of pronouncing the order : October 28, 2025 ORDER Per Pradip Kumar Choubey, Judicial Member: Both the captioned appeals have been preferred by the assessee for the assessment years 2013-14 & 2014-15 against separate orders both dated 17.07.2025 of the Commissioner of Income Tax (Appeals)-27, Kolkata [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’) respectively. Since, the issues involved in both the appeals are common and relate to the same assessee and also are relating to the same search action, therefore, these appeals have been heard together and are being disposed of by this consolidated order. 2. Both the appeals have been filed by the assessee with delay of 60 days. The assessee has filed affidavits for condonation of the delays. After considering the reasons cited in the affidavits for condonation of delay, we find that the reasons are valid and consequently, the delays in filing both the appeals are hereby condoned and we proceed to dispose of the appeals on merits.

3.

IT(SS)A No.139/Kol/24 – This appeal is taken as lead case for the sake of convenience and narrations of facts.

4.

Brief facts of the case are that the assessee filed its return of income u/s 139 of the Act on 24.09.2013 declaring total income at Rs.6,94,560/-. Later, a search and seizure and consequent survey operation u/s 132 of the Income Tax Act 1961, was conducted on 30.07.2018 and subsequent dates on the assessee as a part of "SAGAR Group of cases. Subsequently, the case was centralized with Central Circle-4(1), Kolkata vide Order u/s 127 of the Act dated 19.11.2018. Later, a notice u/s 153C of the Act was issued to the assessee later on. In response to the same, the assessee had filed the return of income for the subjected AY same as earlier i.e., at Rs.6,94,560/- on 16.02.2021. Subsequently, the AO had issued and served all the statutory notices u/s 143(2) & 142(1) of the Act on the assessee in timely manner. In response to the aforesaid notice, the assessee furnished written submission and the AR of the assessee appeared time to time and filed requisite submission and the case was heard by the AO. Later, the AO had passed the assessment order u/s 153C of the Act on 19.07.2021 determining a total Income of Rs.23,44,560/-, and served on the assessee. On perusal of the assessment order, it is observed that the AO had made addition in only one ground viz. unexplained cash credit u/s 68 of the Act in the form of unsecured loan to the tune of Rs.16,50,000/- received from a creditor namely M/s Victor Tradelinks Pvt. Ltd.

5.

Being aggrieved by the said Order, the assessee filed an appeal before the ld. CIT(A), wherein the ld. CIT(A) confirmed the said addition as made by the Assessing Officer.

6.

Being dissatisfied, the assessee is in appeal before us. The ld. AR challenges the very impugned order by taking legal ground as well as on merit. The submission is that the addition made by the Assessing Officer and confirmed by the ld. CIT(A) is unjustified as assessment was completed on the date of search in view of 2nd Proviso to section 153A of the Act and notice u/s 143(2) of the Act is time barred where no incriminating material has been found during the course of search. His further submission is that the loan taken from M/s Victor Tradlink Pvt. Ltd. was Rs. 2,45,00,000/-, loan repayment was made the same year and subsequent year, but addition was made only Rs 16,50,000/- The learned AR has filed bank statement. He has cited following decisions: -

i) ITO Vs Kayathwal Estate(P) Ltd [2022] 139 taxman.com 317 (SC)

ii) DCIT Vs Dailmer Industries Pvt. Ltd ITA No.276/K/2025

iii) ITO vs. Best Cybercity (P) Ltd. 124 taxmann.com

iv) PCIT vs. Ambe Tradecorp (P) Ltd. 145 taxmann.com P-7

v) DCIT vs. Rohini Builders 256 ITR P-360

7.

Contrary to that, the ld. DR supports the impugned order of the ld. CIT(A).

8.

Upon hearing the counsels of the respective parties and on perusal of the impugned order, we find that a search action was conducted on the assessee on 30.07.2018 and the assessment year involved is 2013- 14. On merits, we find that the loan of Rs.2,45,00,000/- taken from M/s Victor Tradelink Pvt. Ltd. was repaid in subsequent years, the ld. AR has given a chart to this effect which is as under:

9.1 We find that the ld. AR has also cited bank statement which reflects the loan amount which is as under:

9.2 It is pertinent to mention here that the loan was taken in order to make business requirement and was repaid during the subsequent years. The loan was received only by way of account payee cheque and interest was also paid on the loan and TDS was deducted on the said loan. It is further important to mention here that the lenders were regular income tax assessees and PANs were on record. We note that the loan amounts were advanced through account payee cheques and the lenders were having sufficient balance in their accounts. We have gone through the cited decisions of the ld. AR and find that in the case of ITO Vs Kayathwal Estate(P) Ltd (supra) wherein the Hon’ble Apex Court has held as under:

“Section 68, read with section 148, of the Income-tax Act, 1961 Cash credit (Unsecured loans) - Assessment year 2012-13 - During year, assessee- company received unsecured loan of certain amount from one RS - Assessee filed its return of income and same was selected for scrutiny and an assessment order was passed After four years, Assessing Officer issued a reopening notice on ground that loan transaction made by assessee with RS was a bogus transaction provided as an accommodation entry by RS, which was a paper concern company, managed by one PJ who was an accommodation entry provider - It was noted that assessee had furnished all details with respect to loan transactions as well as interest paid on loans during original scrutiny assessment It had also submitted acknowledgement of return of income hank statements of RS from whom loan was taken Thus, information as mentioned in reasons recorded, could not be termed as tangible material as fact about loan was very much available with department at time of scrutiny assessment - Further, admittedly loan was subsequently paid back by assessee with interest after deducting TDS thereon High Court by impugned order held that, on facts, it could not be said that assessee had withheld primary material and failed to disclose truly and fully all material fact during original assessment, thus, impugned reopening notice issued against assessee after four years from relevant assessment year was unjustified Whether SLP filed against impugned order of High Court was to be dismissed Held, yes [Para 2] [In favour of assessee]” 9.3 Further it appears to us that the Apex Court has confirmed the decision of the Gujarat High Court and the Gujarat High Court in Kayathwal Estate (P) Ltd. vs. ITO has held as under:

“17. On the facts of present case, we find that the assessee had disclosed fully and truly material facts, with respect to loan transaction as well the interest paid on the loan. Admittedly, the loan was paid up by the 6 assessee on 21-8-2014 with the interest, after deducting TDS thereon. The Assessing Officer at the time of scrutiny assessment, accepted the transaction. Under the circumstances, it cannot be said that the assessee had withheld the primary material and assessee failed to disclose truly and fully all material facts of the assessment. Thus, the conditions precedent for exercise of power under section 147 after expiry of period of 4 years of relevant assessment year are not satisfied, as a result, we hold that assumption of jurisdiction on the part of the Assessing Officer beyond a period of 4 years is invalid and without jurisdiction. Consequently impugned notice dated 28-3-2019 is hereby quashed and set aside.” 9.4 Considering the above discussion and keeping in view the decisions, we find force in the argument of the ld. counsel for the assessee and hold that the addition made u/s 68 of the Act is unjustified and illegal and the same is hereby deleted. Accordingly, the appeal of the assessee in IT(SS) 139/Kol/2024 succeeds in legal grounds as well as on merits.

10.

IT(SS)A No.140/Kol/2024 – Since the facts and issues involved in both the appeals are identical and relate to the same assessee and arise from the same search action, therefore, our findings/directions given above in IT(SS)A No.139/Kol/2024 will mutatis mutandis apply to IT(SS)A No.140/Kol/2024. Hence, IT(SS)A No.140/Kol/2024 is also allowed.

11.

In the result, both the appeals filed by the assessee are allowed.

Kolkata, the 28th October, 2025.

Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated: 28.10.2025. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 7

3.

CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar, Kolkata Benches

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