PRINCIPAL COMMISSIONER OF INCOME TAX-2, KOLKATA vs. M/S. ACME CHEM LIMITED

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ITAT/132/2024HC CalcuttaWBCHCO001420202419 June 2024Bench: THE HON'BLE THE CHIEF JUSTICE T.S SIVAGNANAM,HON'BLE JUSTICE HIRANMAY BHATTACHARYYA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the order impugned before it did not warrant any interference as there was no substantial question of law arising for consideration. The Court noted that the Tribunal, in its order, had followed the decisions of its coordinate Bench in the case of Overtop Marketing Pvt. Ltd. (ITA 686/Kol/2019, dated 15th March, 2021). This order of the Tribunal was challenged before the High Court by the revenue, and the appeal was dismissed, as reported in (2024) 461 ITR 67 (Cal). Therefore, based on the precedent set by the dismissal of the revenue's appeal in the Overtop Marketing Pvt. Ltd. case, the High Court found no substantial question of law and dismissed the present appeal. The stay application was also dismissed.

What were the facts?

The Principal Commissioner of Income Tax – 2, Kolkata (Revenue) has filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated March 31, 2023, passed by the Income Tax Appellate Tribunal, Kolkata (`A’ Bench. The assessment year in question is 2017-18. The appeal challenges the Tribunal's deletion of an addition of Rs. 8,61,00,000/- made under the head of unsecured loan as unexplained cash credit under Section 68 of the Act. The Revenue contends that the Tribunal erred in allowing the assessee's appeal by assuming the assessee discharged its onus regarding the identity, creditworthiness of loan creditors, and genuineness of the transactions based on paper documents.

What were the issues?

1. Whether the Learned Tribunal has committed a substantial error in law in deleting the addition made in the head of unsecured loan of Rs. 8,61,00,000/- as unexplained cash credit under Section 68 of the Income Tax Act, 1961? 2. Whether the Learned Tribunal has committed a substantial error in law in allowing the appeal of the assessee on the issue of unexplained loan and interest thereon, assuming that the assessee discharged its primary onus towards providing the identity and creditworthiness of the loan creditors and genuineness of such loan transaction by relying on the paper documents furnished by the assessee? Assessee's Contentions: The assessee argued that it had discharged its primary onus by furnishing paper documents to establish the identity and creditworthiness of the loan creditors and the genuineness of the loan transactions. The Tribunal, in its impugned order, relied on decisions of its coordinate bench in the case of Overtop Marketing Pvt. Ltd. (ITA 686/Kol/2019), which was subsequently dismissed by the High Court. Revenue's Contentions: The revenue contended that the Tribunal committed a substantial error in law by deleting the addition and by assuming that the assessee had discharged its onus based solely on paper documents.

Which sections of the Income-tax Act were involved?

Section 260A,Section 68

AI-generated summary — verify with the full judgment below

OD-11

IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE

ITAT/132/2024 IA NO: GA/2/2024 PRINCIPAL COMMISSONER OF INCOME TAX – 2, KOLKATA VS. M/S. ACME CHEM LIMITED

BEFORE :

THE HON’BLE THE CHIEF JUSTICE T.S. SIVAGNANAM

And THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA Date : 19th June, 2024

Appearance : Mr. Soumen Bhattacharjee, Adv. …for appellant. Mr. Abhratosh Majumder, Sr. Adv. Mr. Sanjoy Bhowmick, Adv. Mr. A.K. Dey, Adv. …for respondent.

The Court : This appeal by the revenue under Section 260A of the Income Tax Act, 1961 (the Act) is directed against the order dated 31st March, 2023, passed by the Income Tax Appellate Tribunal, Kolkata `A’ Bench, Kolkata (Tribunal) in ITA No.650 /Kol/2022 for the assessment year 2017-18. The revenue has raised the following substantial questions of law for consideration :

i) Whether the Learned Tribunal has committed substantial error in law in deleting the addition made in the head of unsecured loan of Rs.8,61,00,000/- as unexplained cash credit under Section 68 of the Income Tax Act, 1961 ? ii) Whether the Learned Tribunal has committed substantial error in law in allowing the appeal of the assessee on the issue of unexplained loan and interest thereon assuming that the assessee discharged its primary onus towards providing identity and creditworthiness of the loan creditors and genuineness of such loan transaction by relying on the paper documents furnished by the assessee ?

We have heard Mr. Soumen Bhattacharjee, learned standing Counsel appearing for the appellant revenue and Mr. Abhratosh Majumder, learned senior Counsel appearing for the respondent assessee. After elaborately hearing the learned Advocates for the parties and carefully perusing the order impugned in this appeal, we find that the Tribunal, apart from several things, has followed the decisions of its coordinate Bench in the case of Overtop Marketing Pvt. Ltd. in ITA 686/Kol/2019, dated 15th March, 2021. The said order was put to challenge before this Court by the revenue and the appeal was dismissed, as reported in (2024) 461 ITR 67 (Cal).

Thus, we find that the order impugned does not call for any interference as there is no substantial question of law arising for consideration. The appeal is thus dismissed. The stay application IA No: GA/2/2024 is also dismissed.

(T.S. SIVAGNANAM, C.J.)

(HIRANMAY BHATTACHARYYA, J.)

SN/mg.

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