DCIT, CC-3(3), KOLKATA. , KOLKATA vs. LOHARUKA INFRASTRUCTURE PVT. LTD. , KOLKATA

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ITSSA 95/KOL/2023Status: DisposedITAT Kolkata16 October 2025AY 2017-1829 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that while the Ld. CIT(A) correctly noted the lack of direct evidence linking the appellant company to the transactions and the reliance on the 'flagship company' status, the matter required further examination. The Tribunal observed that the seized documents mentioned recipients like 'DNK HL Loharuka and others' and payments to 'HL Loharuka etc.', indicating potential transactions within the Loharuka Group. The Tribunal found merit in the assessee's argument that the company's name was not explicitly mentioned, and the concerned persons denied transactions with the company, attributing them to individuals Anil Loharuka and Sunil Loharuka. However, it also acknowledged that these individuals are key persons of the company, and non-mention of a legal entity's name does not fully absolve it. The Tribunal noted that the Ld. CIT(A) accepted that the amount was disclosed by persons from whom documents were seized, but the exact amount admitted in their returns was not worked out. Therefore, the Tribunal set aside the order of the Ld. CIT(A) and directed a remand. The AO is to work out and quantify the amounts in the seized documents, ascertain which persons from the Disha Group or Shri Kotgire and his employees disclosed these transactions in their income returns, and consider the explanation of the diary owners. The assessee must produce evidence to support claims that transactions were owned up by others or pertain to other group concerns. The appeals were allowed for statistical purposes.

What were the facts?

The Revenue filed appeals against the orders of the CIT(A) for Assessment Years (AYs) 2015-16, 2016-17, and 2017-18. The appeals were filed with a delay of 2 days, which the Tribunal condoned. The original assessments were completed under Section 153A read with Section 143(3) of the Income Tax Act, 1961. A search and seizure operation was conducted on the Loharuka Group on March 20, 2022. The Assessing Officer (AO) made an addition of ₹2,24,83,840/- under Section 69 of the Act as unexplained investment. The assessee contended that no incriminating documents were found during the search at its premises. The CIT(A) deleted the addition, observing that the AO was unsure if the transaction belonged to the appellant and that the addition was based on the appellant being the flagship company of the Loharuka Group, not on concrete evidence linking the appellant to the transactions.

What were the issues?

1. Whether the deletion of the addition made under Section 69 of the Act by the Ld. CIT(A) was justified, ignoring corroborative evidence gathered during Search & Seizure proceedings? 2. Whether the Ld. CIT(A) erred in deleting the addition after accepting new evidences without invoking Rule 46A of the Income Tax Rules, 1962? 3. Whether the Ld. CIT(A) erred in deleting the addition merely by accepting that the transaction was already taxed in the hands of another assessee, without going into the details? Assessee's Contentions: - No incriminating documents were found in the case of the assessee during the search. - The AO was unsure if the transaction belonged to the appellant or if the amount was to be added to the appellant's income. - The addition was not based on any concrete evidence linking the appellant company to the transactions. - No evidence was found during the search at the appellant's premises, in statements recorded, or in post-search inquiries linking the transactions to the appellant. - The Ld. CIT(A) relied on Delhi High Court decisions in PCIT (Central) - 3 vs. Anand Kumar Jain (HUF) and Principal Commissioner of Income Tax vs. Best Infrastructure (India) Private Ltd., holding that statements recorded under Section 132(4) do not, on a standalone basis, constitute incriminating material. Revenue's Contentions: - The Ld. CIT(A) was not justified in deleting the addition made under Section 69 of the Act, ignoring corroborative evidence gathered during Search & Seizure proceedings. - The Ld. CIT(A) erred in deleting the addition after accepting new evidences without invoking Rule 46A of the Income Tax Rules, 1962. - The Ld. CIT(A) erred in deleting the addition by merely accepting that the same transaction has already been taxed in the hands of another assessee without going into the details.

Which sections of the Income-tax Act were involved?

Section 69,Section 153A,Section 143(3),Section 132(4),Section 132(4A),Section 131,Section 46A

AI-generated summary — verify with the full judgment below

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

Before: SHRI DUVVURU RL REDDY(KZ) & SHRI RAKESH MISHRA

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA Before SHRI DUVVURU RL REDDY, VICE PRESIDENT (KZ) & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T. (S.S.)A. Nos.: 93, 94 & 95/KOL/2023 Assessment Years: 2015-16, 2016-17 & 2017-18 DCIT, CC-3(3), Kolkata Loharuka Infrastructure Pvt. Ltd. Vs. (Appellant) (Respondent) PAN: AABCG6822C Appearances: Department represented by : Sanat Kumar Raha, CIT(DR). Assessee represented by : Sanjay Modi, FCA. Date of concluding the hearing : 24-July-2025 Date of pronouncing the order : 16-October-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: These appeals filed by the Revenue are against the separate order of the Commissioner of Income Tax (Appeals)- NFAC, Delhi [hereinafter referred to as ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2015-16, AY 2016-17 & AY 2017-18 dated 31.03.2023, which have been passed against the assessment orders u/s 153A r.w.s. 143(3) of the Act, dated 30.09.2021. 1.2 Since the issues are common, therefore, all these appeals were taken up together, heard together and are being decided vide this common order for the sake of convenience and brevity. We will take up I.T. (S.S.)A. No.: 93/KOL/2023 as the lead case for adjudication.

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In view of the relief afforded to the appellant as per grounds 1,3,4,5 and 6, there is no need to adjudicate upon this ground. GROUND NO 7 In this ground the appellant has agitated initiation of penalty proceedings u/s. 271(1)(c). This ground is premature since a ground, at this forum, can be raised upon the imposition of penalty and not against the initiation of penalty proceedings. This ground thereof stands dismissed. GROUND NO 8 This ground is general in nature and as such not adjudicated upon. The appeal in the result is partly allowed.” 4. The Revenue has challenged the order of the Ld. CIT(A). In Ground no. 1 it is stated that though the Ld. CIT(A) was not justified in deleting the addition made u/s 69 of the Act ignoring the facts that there was corroborative evidence gathered during Search & Seizure proceedings. During the course of appeal before us the Ld. AR as well as the Ld. DR filed clarifications which were sought and the same have been considered. The Ld. AR submitted that at no point of time the assessee was asked to explain the entries in the diaries. The assessee has filed written submission which is reproduced as under: “… 3. That a search and seizure had taken place at the premises of the respondent company on 21.01.2020. No incriminating documents were found or seized from the premises of the respondent during the course of the search. 4. That the diaries bearing identification mark A-12, A26, A28, A33, A36, A37, A38, A39, A40, A41, A42, A43, A44, A46, A47, A48, A51, A52, A53, A56, A57, A59, A64, A65, A66, A69, A73, A77 & A93 based on which addition has been made were seized by the Income Tax Department during a search from the premises of Mr D N Kotgire (more specifically from premises of his employees Shri Ratnakar Kulkarni) and not from the premises of the respondent company .

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Assistant Registrar ITAT, Kolkata Benches Kolkata

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