ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 4(1), KOLKATA, KOLKATA vs. BURNPUR CEMENT LIMITED, ASANSOL

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ITSSA 18/KOL/2025Status: DisposedITAT Kolkata30 July 20254 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the CIT(A), dismissing the Revenue's appeal. The Tribunal observed that the assessee had repaid the unsecured loans along with interest through banking channels after deducting TDS. The CIT(A) had made a clear finding that no benefit was derived by the assessee as the loans were repaid. The Tribunal noted that the assessee had furnished all relevant evidence to the authorities. The Tribunal agreed with the CIT(A)'s conclusion that the addition was not covered under Section 68 of the Act. The Tribunal relied on the jurisdictional High Court's decision in PCIT vs. Ambe Tradecorp (P.) Ltd., which held that once loan repayment is established by documentary evidence, credit entries cannot be viewed in isolation, ignoring debit entries. The Tribunal also found support from a co-ordinate bench decision in Poddar Realtors Vs. ITO. Consequently, no interference with the CIT(A)'s order was warranted.

What were the facts?

The Revenue is in appeal against the order of the CIT(A) for Assessment Year 2014-15, which deleted an addition of Rs. 1,60,00,000/-. The addition was made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, 1961, on account of unexplained cash credit. The AO's action was based on a document seized during a search operation, indicating that the assessee received loans of Rs. 10,00,000/-, Rs. 1,00,00,000/-, and Rs. 50,00,000/- from M/s. Ajanta Vinimay Pvt. Ltd., M/s. Padmakshi Vyapaar Pvt. Ltd., and M/s. Sanwaria Marketing Pvt. Ltd., respectively. These additions were further supported by the statement of Shri Prawesh Beria, who admitted to being a director of companies providing accommodation entries. The assessee had filed its return of income, and subsequently, a search was conducted, leading to a notice under Section 153A.

What were the issues?

1. Whether the addition of Rs. 1,60,00,000/- as unexplained cash credit under Section 68 of the Income Tax Act, 1961, is justified, considering the assessee's claim of repayment of loans through banking channels? Assessee's Contentions: The assessee argued that the unsecured loans were repaid along with interest through banking channels after deducting TDS. The assessee provided all necessary documentary evidence, including loan confirmations, bank statements, ITRs, audited Balance Sheet, and Profit and Loss account, to the AO and the CIT(A). The assessee relied on the decision in PCIT vs. Ambe Tradecorp (P.) Ltd. (2022) and a co-ordinate bench decision in Poddar Realtors Vs. ITO. Revenue's Contentions: The Revenue's appeal is based on the AO's finding that the cash credits were unexplained and originated from paper/shell companies, supported by the statement of Shri Prawesh Beria.

Which sections of the Income-tax Act were involved?

Section 68,Section 153A,Section 144,Section 139(1),Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: Shri Rajesh Kumar, AM& Shri Pradip Kumar Choubey, JM]

Pronounced: 30.07.2025

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA [Before Shri Rajesh Kumar, AM& Shri Pradip Kumar Choubey, JM] I.T(SS).A. No. 18/Kol/2025 Assessment Year: 2014-15 ACIT, Central Circle - 4(1), Kolkata Vs. Burnpur Cement Ltd. Palasdiha Gram, Panchgacha Road, Kanyapur, Burdwan-713341. (PAN: AACCA1999B) Appellant Respondent

Date of conclusion of Hearing 13.05.2025 Date of Pronouncement 30.07.2025 For the Appellant Shri A. K. Tulsyan, AR For the Respondent Shri P. N. Barnwal, CIT, DR

ORDER Per Shri Rajesh Kumar, AM The captioned appeal filed by the revenue is directed against the order of Ld. CIT(A), Kolkata-27dated 26.10.2024for AY 2014-15 arising out of assessment orders passed u/s. 153A/144of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) by DCIT, Central circle-4(1), Kolkata all dated 31.12.2018.

2.

The sole issue involved in the revenue’s appeal is against the order of Ld. CIT(A) deleting the addition of Rs.1,60,00,000/- as made by the Assessing Officer on account of unexplained cash credit received by the assessee from paper/shell companies.

3.

Facts in brief are that the assessee filed its return of income u/s. 139(1) of the Act on 30.11.2024 declaring total income at Rs.2,77,85,770/-. The case was selected under scrutiny and assessment was completed u/s. 143(3) of the Act on 23.12.2016 determining total income at Rs.2,77,85,770/-. Thereafter, search was conducted on 20.10.2016. Notice u/s. 153A of the Act was issued on 11.04.2017 and the same was complied with on 21.08.2018 by filing return of income declaring total income at Rs.2,77,85,770/- as declared in the original return. Thereafter,

2 IT(SS)A No. 18/Kol/2025 Burnpur Cement Ltd.AY 2014-15 statutory notice along with questionnaire was issued. The Assessing Officer observed that during the course of search operation a document BCL-15 bearing page no. 157 was seized which stated that assessee had received unexplained loan of Rs.1,60,00,000/- from three parties viz., M/s. Ajanta Vinimay Pvt. Ltd., Rs.10,00,000/-, from M/s. Padmakshi Vyapaar Pvt. Ltd. Rs.1,00,00,000/- and from M/s. Sanwaria Marketing Pvt. Ltd. Rs.50,00,000/-. These loans were also added on the basis of statement of Shri Prawesh Beria recorded from August 2004 to June 2009 in which he accepted that he was Director of several companies including M/s. Padmakshi Vyapaar Pvt. Ltd. which were providing accommodation entries to several beneficiaries. Consequently, the above additions were made in the assessment framed as unexplained cash credit u/s. 68 of the Act.

4.

In the appellate proceeding, the addition was deleted by the Ld. CIT(A) after taking into account the contentions and submissions of the assessee by observing and holding as under:

IT(SS)A No. 18/Kol/2025 Burnpur Cement Ltd.AY 2014-15 6. After hearing the rival contentions and perusing the material available on record, we observe that the assessee has taken unsecured loans from three concerns as stated hereinabove and repaid the same along with the interest through banking channel after deduction of TDS. The ld. CIT(A) had recorded a very clear-cut finding to this effect that these loans were repaid by assessee and, therefore, no benefit was derived by the assessee. The Ld. CIT(A) also held that the assessee has furnished all the evidences in respect of these loans before the Assessing Officer as well as before the first appellate authority including loan confirmations, bank statements, ITRs, audited Balance Sheet and profit and loss account. Finally, the ld. CIT(A) deleted the addition by holding that the addition is not covered under the provision of section 68 of the Act. The case of the assessee also finds support from the decision of Hon’ble jurisdictional High Court in the case of PCIT vs. Ambe Tradecorp (P.) Ltd. (2022) 145 taxmann.com 27 (Gujarat), in which the Hon'ble High Court has held that once the repayment of loan has been established based on the documentary evidences then the credit entries cannot be looked in isolation after ignoring the debit entries despite the fact that debit entries were carried out in the later years. Even the case of the assessee is squarely covered by the decision of the co-ordinate bench decision in the case of Poddar Realtors Vs. ITO in ITA No. 265/Kol/2023, vide order dated 22.06.2023. Under these circumstances, we do not find any infirmity or defect in the order of the ld. CIT (A) which warrant our interference. Accordingly, we uphold the appellate order by dismissing the appeal of the Revenue.

6.

In the result, the appeal of the revenue is dismissed.

Order is pronounced in the open court on 30th July, 2025

SD/- SD/- (Pradip Kumar Choubey) (Rajesh Kumar) Judicial Member Accountant Member Dated: 30th July, 2025 JD, Sr. PS/SS, Sr. PS

IT(SS)A No. 18/Kol/2025 Burnpur Cement Ltd.AY 2014-15 Copy of the order forwarded to:

1.

Appellant–ACIT, Central Circle-4(1), Kolkata 2. Respondent – Burnpur Cement Ltd. 3. CIT(A), NFAC, Delhi 4. Pr. CIT 5. DR, ITAT, Kolkata, True Copy By Order

Assistant Registrar ITAT, Kolkata Bench, Kolkata

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