GOLDEN GOENKA FINANCIAL ADVISORS PVT. LTD.,KOLKATA vs. I.T.O., WARD - 3(1), KOLKATA

ITA 1253/KOL/2026Status: DisposedITAT Kolkata15 October 2026AY 2019-20206 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of ₹52,42,900/- under Section 68 could not be sustained. It was an undisputed fact that the loans received from M/s Pandora Tie Up Pvt. Ltd. and M/s Jajodia Finance Limited were completely refunded by the assessee within FY 2018-19 through proper banking channels. The Tribunal noted that the net worth of the creditor companies was substantial. The assessee had provided ledger confirmations, bank statements evidencing receipt and repayment, audited accounts and income tax returns of the creditors, and lists of directors. The Tribunal relied on the well-settled judicial precedent of the Hon'ble Kolkata High Court, which states that where unsecured loans received during the financial year are refunded in full within the same year through account payee banking channels, no addition under Section 68 is warranted. The Tribunal reasoned that when funds flow into the account and flow back to the lender within the same financial year, the transaction neutralizes itself, establishing the bona fide commercial nature. The AO failed to establish any nexus or evidence that the funds refunded to the lenders flowed back to the assessee in cash. In the absence of positive material proving that the source of funds originated from or returned to the assessee's undisclosed coffers, an addition under Section 68 cannot be sustained solely on third-party statements. Consequently, the addition made by the AO and confirmed by the CIT(A) was deleted.

What were the facts?

The assessee, Golden Goenka Financial Advisors Private Limited, filed its original return for Assessment Year 2019-20 declaring an income of ₹38,100/-. The Assessing Officer (AO) initiated reassessment proceedings under Section 147 based on information from the Investigation Wing regarding a search on the Raj Group. The AO alleged that the assessee received accommodation entries totaling ₹52,42,900/- as unsecured loans: ₹26,00,000/- from M/s Pandora Tie Up Pvt. Ltd. and ₹26,42,900/- from M/s Jajodia Finance Limited. The AO added this entire amount under Section 68 and taxed it under Section 115BBE. The Commissioner (Appeals) sustained the addition, finding that mere banking channel transactions and repayment within the financial year did not establish genuineness. The assessee appealed to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the addition of ₹52,42,900/- under Section 68 of the Income Tax Act, 1961, can be sustained when the entire unsecured loan raised during the financial year was fully repaid within the same financial year through banking channels? Assessee's contentions: The entire unsecured loan of ₹52,42,900/- taken during FY 2018-19 was fully repaid within the same financial year through regular banking channels. This repayment negates any inference of unexplained cash credits or rotation of unaccounted funds. The assessee submitted bank statements, confirmations, audited accounts, and ITR acknowledgments of the lender companies. Furthermore, in the cases of the lender entities themselves, proceedings under Section 147 for AY 2019-20 resulted in deletion/acceptance of their transactions by the Department, indicating inconsistency in the Department's stand. Revenue's contentions: Investigation reports established the lenders as paper/shell entities operated by entry providers. Repayment through banking channels does not automatically cure non-genuineness under Section 68.

Which sections of the Income-tax Act were involved?

Section 147,Section 68,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: Shri Rajesh Kumar & Shri Pradip Kumar Choubey

Per Pradip Kumar Choubey, Judicial Member:

This appeal filed by the assessee is directed against the order dated 20.03.2026 of the Office of the National Faceless Appeal Centre (NFAC), Delhi passed under Section 147 of the Assessment Year 2019-20 of the Income-Tax Act, 1961 (hereinafter referred to as “the Act”).

2.

The brief facts of the case of the assessee is that the Assessee filed its original return of income for A.Y. 2019–20 declaring total income of ₹38,100/-

The order continues below.

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