ACIT, KOLKATA vs. LIBERAL VINCOM PVT. LTD., DARJEELING, W.B.

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ITA 2297/KOL/2024Status: DisposedITAT Kolkata30 October 2026AY 2009-1010 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) and dismissed the Revenue's appeals. The Tribunal noted that as of the search date, the assessment had attained finality, making the impugned year an unabated assessment. Therefore, any addition by the AO could only be based on incriminating materials found and seized during the search. The AO referred to seized document SMA 03 (WhatsApp conversation) as incriminating material but failed to explain how it was incriminating concerning the unexplained loan. The Tribunal observed that the person whose mobile was seized was neither a Director nor a shareholder of the Assessee company, and the conversation had no reference to the Assessee's transactions. The CIT(A) had comprehensively found that no incriminating material relating to the unsecured loan was found during the search. Relying on decisions in CIT Vs. Kabul Chawla, CIT Vs. Continental Warehousing Corporation (Nhava Sheva), and Pr. CIT, Central-3 vs. Abhisar Buildwell Private Limited, the CIT(A) deleted the addition. Furthermore, the CIT(A) had also deleted the addition on merits, noting that the Assessee's request for cross-examination was not provided, and the AO failed to provide the relied-upon statement. The CIT(A) also pointed out that in the Assessee's own case, an assessment under Section 143(3) had accepted these transactions. Consequently, the Tribunal found no reason to interfere with the CIT(A)'s order.

What were the facts?

The Revenue filed appeals against the orders of the CIT(A) for assessment years 2009-10, 2013-14 to 2017-18, and 2014-15. The appeals were filed with a delay, which the Tribunal condoned after the Revenue cited administrative approval as the reason and the Assessee did not oppose. The appeals were heard together as they involved common issues. The primary dispute concerned an addition of Rs. 65,00,000/- made by the Assessing Officer (AO) for unsecured loans and Rs. 1,24,767/- as interest thereon, which the CIT(A) had deleted. The AO's addition was based on a search conducted on 30.11.2017, which led to the issuance of a notice u/s 153A of the Income Tax Act, 1961. The AO alleged that the Assessee had brought back unaccounted money through shell companies, specifically identifying Vicky Fincon Private Limited as the source of the loan. The AO relied on WhatsApp conversations from a seized mobile and noted poor creditworthiness of the loan creditor.

What were the issues?

1. Whether the addition of Rs. 65,00,000/- as unexplained cash credit and Rs. 1,24,767/- as disallowance of interest on unsecured loans is sustainable in an unabated assessment year when no incriminating material was found during the search, turning on Section 153A of the Income Tax Act, 1961. Assessee's Contentions: - The assessment year was unabated and completed, thus additions in a search assessment could only be made based on incriminating material found during the search. - The AO's additions were based on information reflected in the return of income/audit report, not on incriminating evidence found during the search. - The seized document (WhatsApp conversation) did not contain specific findings or details relating to the Assessee's transactions. - The person whose mobile was seized was not a director or shareholder of the Assessee company, and the conversation did not refer to the Assessee's transactions. - The Assessee provided audited balance sheets, ITR acknowledgments, bank statements, source of funds, confirmations, and documents of Vicky Fincon Private Limited (VFPL) to support the transaction. - VFPL is an NBFC regularly assessed by its jurisdictional AO, and its assessment orders were filed. - VFPL had sufficient net worth and was doing well financially. - The lender company confirmed the transaction. - The AO failed to provide cross-examination of the operators alleged to have provided accommodation entries and the statements relied upon. - The Assessee had already been assessed u/s 143(3) for a prior period where these transactions were examined and accepted. Revenue's Contentions: - The AO treated the loan taken from Vicky Fincon Private Limited as an unexplained cash credit, relying on the decision in Sumati Dayal v. Commissioner of Income Tax [1995] 214 ITR 801(SC). - The loan creditor appeared in the list of shell companies prepared by the Investigation Wing, Kolkata. - The seized documents indicated that Vicky Fincon Private Limited was utilized for providing loan accommodation entries.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3),Section 133(6),Section 131,Section 139(1),Section 143(2),Section 142(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR & SHRI PRADIP KUMAR CHOUBEY

For Appellant: Shri Miraj D Shah, AR
For Respondent: Shri Sanjit Kumar Das, CIT, DR
Hearing: 29.10.2026Pronounced: 30.10.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER

ITA Nos.2297, 2324 to 2327 & 2333/KOL/2024 (A.Ys.:2009-10, 2013-14 to 2017-18 & 2014-15)

ACIT, Central Circle-1(3), Vs. Liberal Vincom Pvt. Ltd. Kolkata Sinclaries Hotel Ltd. NH, Aaykar Poorba-110, Shanti Palli, Mallaguri, Pradhan Nagar, Kolkata-700107 Siliguri, Darjeeling-734003 (Appellant) (Respondent) PAN No. AABCL5005E Assessee by : Shri Miraj D Shah, AR Revenue by : Shri Sanjit Kumar Das, CIT, DR Date of hearing: 29.10.2026 Date of pronouncement: 30.10.2026

O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER:

The above captioned Appeals have been filed by the Revenue against the orders of the Commissioner of Income Tax (Appeals), Kolkata [hereinafter referred to as ‘the Ld.CIT(A)] passed u/s 250 of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’], dated 07.08.2024, 26.07.2024, 26.07.2024, 26.09.2024, 26.07.2024 & 13.09.2024 for the assessment years (A.Y.) 2009-10, 2013-14, 2015-16, 2016-17, 2017-18 & 2014-15 respectively.

2.

There is a delay of 43 days in ITA No.2297/Kol/202, 56 days in ITA Nos.2324, 2325 & 2327/Kol/2024 and 09 days in ITA No. 2333/Kol/2024 in filing the Appeals, respectively.

4.

Since these appeals pertain to the same Assessee and involve common issues, therefore, they were heard together and are being disposed of by this common order for the sake of brevity and convenience. First, we take up ITA No. 2324/KOL/2024 for A.Y. 2013-14 as a ‘lead’ case.

5.

The issue raised in the Ground No.1, 2 and 3 is against the order of the Ld. CIT(A), deleting the addition of Rs.65,00,000/- as made by the Assessing Officer in respect of bogus unsecured loans and interest thereon of Rs.1,24,767/- by ignoring the fact that Assessee failed to prove identity, creditworthiness of the loan creditors and genuineness of the transactions.

6.

The facts in brief are that, Assessee filed its return of income on 15.01.2014, declaring total income at NIL. A Search and Seizure operation was conducted u/s 132(1) of the Act, by the ADIT (Investigation), Unit-1 & 2 Jalpaiguiri, on ‘Begraj group’ of cases on 30.11.2017. Simultaneously, the search was conducted at the office / business premises of the Assessee on the same date and the

4.

In the Appellate proceedings, the Ld. CIT(A) allowed the Appeal of the Assessee, by observing and holding as under:-

“I have carefully considered the facts of the case and submission of the appellant. Assessee had filed original return of income u/s.139(1) of the I.T. Act and no proceedings were pending in respect of the said return. Time for selecting the case for scrutiny was over long before the date of search. Thus, the current assessment year falls in the category of un-abated assessment year/completed assessment year. Appellant has cited several judicial decisions which have held that additions in search assessment could not be made in respect of any incriminating material not found during search in the case of un- abated/completed assessment. Nature of additions in the current year reveals that the decisions are based on the information reflected in the return of income/Audit report and not on the basis of any incriminating evidences found during search. No incriminating

8.

Since the issues involved in other connected Appeals are identical and similar to the issue decided by is in the ITA No.2324/Kol/2024, therefore our decision would apply, mutatis mutandis, to these appeals as well. Consequently the appeals of the revenue are dismissed.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 30.10.2026 Deepak Prakash, P.S Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT 5. Guard file.

//TRUE COPY// BY ORDER, MANISH Digitally signed by MANISH KUMAR KUMAR BHOI Date: 2026.11.02 BHOI 12:09:48 +05'30'

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