DCIT, CENTRAL CIRCLE, KOLKATA, INCOME TAX DEPARTMENT, KOLKATA vs. GOAN RECREATION CLUBS PRIVATE LIMITED, SILIGURI

It appears from the record of the registry that the appeals have been filed by the Revenue after delay of 51 days, in IT(SS)A Nos. 81 & 82/KOL/2024. The ld. DR submitted that in fact the delay is only of 51 days in IT(SS)A Nos. 81 & 82/KOL/2024. For this, a condonation petition has been filed by the ld. DR in IT(SS)A Nos. 81 & 82/KOL/2024. The ld. AR did not raise any objection in condoning the

The only issue raised by the Revenue is against the deletion of addition of ₹4,27,00,000/-received from M/s Rajputana General Commercial Corporation Private Limited and ₹87,00,000/- from Shri Sarju Sharma & M/s Fairland Sales Pvt. Ltd., which were made by the ld. AO by treating the same as unexplained credit u/s 68 of the Act.

The facts in brief are that the assessee filed the return of income on 03.10.2019 declaring total income at Rs. 8,14,38,270/-. A search and seizure action u/s 132 of the Act and survey operation u/s 133A of the Act was conducted on 10.08.2018 and subsequent dates on Shri Sarju Sharma group of cases. The assessee being one of the group concerns and was covered in the search operation. Notice u/s 153A of the Act was issued and served upon the assessee which was replied by the assessee by filing the return of income on 15.03.2019, declaring the same income and loss as were declared in the return of income filed originally u/s 139(1) of the Act. Thereafter, the statutory notices were duly issued and served upon the assessee. The assessee filed the necessary evidences as called for by the ld. AO. During the assessment proceedings, the ld. AO observed that the assessee company has taken unsecured loan from M/s M/s Rajputana General Commercial Corporation Private Limited amounting to ₹4,27,00,000/-. The assessee has paid interest to the said lender during the year of ₹12,32,671/-. The ld. AO noted in Para 9.1 of the assessment order that a search and survey operation u/s 132 of the Act was conducted in the case of Shri Sanjeev Kejriwal on 26.10.2017 and during the course of search his statement was recorded on oath u/s 132(4) of the

In the appellate proceedings, the ld. CIT (A) deleted the addition after taking into consideration the contentions and submissions and documentary evidences filed by the assessee and deleted the addition of ₹4,27,00,000/-.While deleting the addition, the ld. CIT (A) noted in Para 7.2 that M/s Rajputana General Commercial Corporation Private Limited has sent financials to the extent of such unsecured loans to the assessee. The ld. CIT (A) further noted that both in the assessment proceedings as well as in the appellate proceedings, the assessee has submitted all the relevant details and documents in support of identity and creditworthiness and genuineness of the transactions by providing relevant bank statements, copies of ledger ,

After hearing the rival contentions and perusing the materials available on record, we find that during the assessment proceedings, the assessee has filed the loan confirmation, ITR, audited financial , statement ,statements of sources of funds of the lender M/s Rajputana General Commercial Corporation Private Limited, which were also filed before the CIT (A) and before us. Copies of these evidences/ documents are placed at page no. 234 to 270 of the paper book. Therefore, we find that the assessee has discharged its onus/ burden by filing the necessary documents/ evidences from the third party and mere reliance by the ld. AO on the statements recorded during the search is not sufficient to treat the loan taken as unexplained cash credit. Moreover, the addition cannot be made on the basis of the third party statement without there being any corroborating material on the record and the case of the assessee find force from the decision of the CIT vs. Harjeev Aggarwal (supra) and PCIT vs. Best Infrastructure (India) (supra), which have been followed by the ld. CIT

The issue raised in ground no.2 is against the deletion of ₹87,00,000/- by the ld. CIT (A) as made by the ld. AO on account of unexplained cash credit u/s 68 of the Act.

The facts in brief are that during the course of assessment proceedings, the ld. AO observed that investigation wing is found that assessee has received unsecured loans from the following entities

According to the ld. AO, these three loans were the end result of three distinct cash trails which were initialized with cash deposits in different third-party companies and therefore, held that these were nothing but shell companies as they were controlled and operated by Shri Pradip Kumar Aggarwal and Shri Anup Seth, who were entry operator. During the course of assessment proceedings, a show cause

In the appellate proceedings, the ld. CIT (A) deleted this addition by observing and holding as under:-

The appeal in IT(SS) A No. 81/KOL/2024 of the Revenue is dismissed.

The issue raised in ground no.1 is against the deletion of addition of ₹2,50,00,000/- received from M/s Rajputana General Commercial Corporation Private Limited, which was made by the ld. AO on account of being bogus and being assessee’s own money rooted through said entity.

Since, we have already decided a similar issue in ground no.1 in IT(SS)A No. 81/KOL/2024 and the above decision would apply mutatis mutandis to this appeal of Revenue in IT(SS)A No.82/KOL/2024 as well. Hence, the appeal of Revenue in IT(SS)A No. 1426/K/2024 is dismissed.

The issue raised in ground no.2 is against the order of ld. CIT (A) estimating the income at 10% of the total expenditure of ₹2,24,10,020/-.

The facts in brief are that during the course of search operation, the search team found and seized material marked as GRC/12 from the

In the appellate proceedings, the ld. CIT (A) estimating the income at 10% of the total amount on the ground that the ld. AO added the amount on the basis of seized document marked as GRC-12 by holding that the addition was only made on the basis of presumption and assumption and without there being any reasoned basis. The ld. CIT (A) also noted that the time and again the assessee has itself denied about that the pen drive and the transactions contained therein. Under these circumstances, we are of the view that the estimation made by the ld. CIT (A) is very reasonable and fair and need no interference at our end. Accordingly, we upheld the order of ld. CIT (A) on this issue by dismissing the ground no. 2 of the appeal.

The issue raised in ground no.3 is against the order of ld. CIT (A) on account of treating the interest expenses of ₹91,38,415/- of M/s

The Revenue’s appeal in IT(SS)A No. 82/KO/2024 is dismissed.

The issue raised in ground no.1 of IT(SS)A Nos. 86 & 87/KOL/2024, are similar to ground no.3 of IT(SS)A No. 82/KOL/2024, wherein we have upheld the order of ld. CIT (A) by holding that interest payment to M/s Rajputana General Commercial Corporation Private Limited is genuine and accordingly, our decision in ground no. 3 in ITA No. 82/KO/2024 would apply mutatis mutandis to these appeals of Revenue in IT(SS)A No.86 & 87/KOL/2024 as well. Hence, the appeals of Revenue are dismissed.

In the result, all the appeals of the Revenue are dismissed.