DEPUTY COMMISSIONER OF INCOME TAX, KOLKATA vs. CENTURY ALUMINIUM MFG COMPANY LIMITED, KOLKATA

Assessment Year: 2012-13 DCIT, Circle-13(1), Kolkata……….……………… …………….……….……Appellant vs. Century Aluminium MFG Company Ltd..…….………….......……...…..…..Respondent Raja Road, P.O. Sukchar, Barrackpur-II, 24 Parganas, W.B-700115.. [PAN: AABCC2200Q] Appearances by: Shri Pradeep Dung Dung, Sr. DR, appeared on behalf of the appellant. Shri Miraj D Shah, AR, appeared on behalf of the Respondent. Date of concluding the hearing : December 02, 2025 Date of pronouncing the order : December 17, 2025 ORDER

Per Pradip Kumar Choubey, Judicial Member:

Century Aluminium MFG Company Ltd 6. Contrary to that, the ld. AR supports the impugned order thereby submitting that the assessee is in the business of aluminium products where material cost comprises of 90% of the sales price and due to various factors, during the year under consideration, the assessee faced liquidity crunch from time to time and approached to a money lending company for the same and the assessee obtained an interest bearing loan of Rs.1,00,00,000/- from M/s Shubh Suppliers Limited and incurred an interest expense of Rs.605,416/- subjected to TDS u/s 194A of the Act and the said loan was fully repaid during the year and also the unpaid interest was paid immediately in the next year. The ld. AR submits that during the assessment proceedings, the assessee submitted all the relevant documents and the Assessing Officer accepted those documents and did not find any defect or discrepancy. The ld. AR further submits that the Assessing Officer made the addition only on the failure of appearance of the lender company before him in response to notice u/s 133(6) of the Act. His submission is that the assessee had taken loan from a said company namely M/s Shubh Suppliers Limited which was incorporated by taking registration under the Companies Act and has CIN number and has certificate of incorporation issued by Registrar of Companies and has valid PAN and is a filer of Annual Income Tax Returns. His submission is that the financial strength of the lender entity cannot be doubted by examining audited Balance Sheets which shows the assessee provided loan of Rs.100 lakhs, it possessed own fund of Rs.1725 lacs. The ld. AR also submits that loan amount of Rs.1,00,00,000/- was repaid in the same year and interest was paid in the subsequent year and all such transactions were made by account- payee cheques and bank statement was also submitted. His submissions that the identity of the lender companies cannot be doubted as relevant documentary evidences were placed on record and the alleged Century Aluminium MFG Company Ltd transaction in question was done through banking channels and loan confirmations from the creditors were produced on record. The ld. AR submits that there is no irregularity in the impugned order of the ld. CIT(A) and the ld. CIT(A) has discussed everything in details in his impugned order. To support his contention, the ld. AR has submitted the following judicial pronouncements:

RTGS from Account no. Date Amount (Rs.) IDBI Bank 060102000073981 23.06.2011 35,00,000 Brabourne Road, 25.06.2011 10,00,000 Kolkata 05.07.2011 15,00,000 12.07.2011 13,00,000 13.07.2011 7,00,000 17.07.2011 10,00,000 90,00,000 Development Credit 08920200003582 13.07.2011 10,00,000 Bank Brabourne Road, Kolkata Total 1,00,00,000 Century Aluminium MFG Company Ltd 7.1 We further find that during the assessment proceedings, the assessee submitted details of the lender company namely M/s Shubh Suppliers Limited such as registration under the Companies Act, valid CIN number & PAN number and certificate of incorporation issued by Registrar of Companies and the assessee is as Income tax assessee. We note that the lender company has sufficient net worth to provide loan of Rs.100 lakhs to the assessee company, a chart showing the details as under:

Subscribers Loan provided to Net Worth of the Assessee Subscribers (Share Capital & Free Reserves) During FY 2011- 31.03.2012 12 31.03.2011 Shubh Suppliers Ltd 1,00,00,000 17,24,25,862 11,54,15,010 7.2 We find that in respect of the said loan of Rs.1,00,00,000/-, the assessee accrued an interest of Rs.605,416/- which was duly booked in the accounts after deducting and depositing TDS u/s 194A of the Act and the principal was repaid during the same year whereas the interest was repaid in the next year and all the transactions were duly recorded in the books of the assessee and were reflected in the bank statement of the assessee and the following documents were submitted to prove the same: a) Ledger of the lender & loan (balance) confirmation b) Bank statement showing receipt of loan amount c) TDS certificate showing gross interest & TDS u/s 194A d) Bank statement showing interest payment by assessee 7.3 We further find that the TDS certificate reflected the gross amount of interest payable and the details of tax deducted and deposited following the provisions of section 194A of the Act:

Amount paid or Nature of payment Date of payment credited 672,685 194A 17.03.2012 Amount deducted BSR Code Date of deposit 67,269 6390340 30.04.2012 7.4 We find that the ld. CIT(A) has in his order has elaborately discussed the issue which are essential to reproduce as under:

“In my considered opinion, the transaction is beyond suspicion because of the following reasons:

1. 1. The money has been received through banking channel and returned through the banking channel. The banks regularly verify KYC of the account holders.

2. The interest has been charged and the appellant has paid interest and deducted TDS on it.

3. During the appellate proceedings, the appellant has submitted following documents of M/s Shubh Suppliers Ltd: a) CIN of lender as per MCA b) ITR(Acknowledgement) with computation, AY 2012-13 c) Audited accounts of the lender for FY 2011-12 d) Loan Confirmation as on 31.03.2012 e) Ledger of assessee in the books of Shubh Suppliers Ltd f) Bank statement for the loan transaction with assessee g) Order passed u/s 143(1) for Shubh Suppliers, AY 12-13 The reliance is also placed on Honorable Bangalore High Court Decision in the case of Pr. CIT vs Veedhata Tower Pvt. Ltd, order dated 21.04.2018 has held that when assessee has also paid interest to the lenders, it has also deducted tax at source, Loan have been duly repaid, some part has been repaid even in the present assessment year. In these circumstances, in our considered opinion assessee has discharged the onus. The assessing officer has not brought on record any cogent material to make the addition as unproved cash credit. Hence, the addition made by the assessing officer is not sustainable.”

7.5 We have gone through the cited decisions of Hon’ble Jurisdictional High Court including the decision in the case of PCIT vs. Alom Extrusions Ltd. (supra), wherein, the Hon’ble High Court held as under:

“This appeal filed by the Income Tax Department under Section 260A of the Income Tax Act, 1961 (the Act) is directed against the order dated December 14, 2023 passed by the Income Tax Appellate Tribunal "A" Bench, Kolkata (The Tribunal) in for the assessment year 2015-16. The revenue has raised the following substantial questions of law for consideration : i) Whether the Learned Income Tax Appellate Tribunal has committed substantial error in law in upholding the order of the Commissioner of Income Tax (Appeals) deleting the disallowance made under Section 68 of the Income Tax Act, 1961 on account of unsecured loan from shell companies amounting to Rs.3,00,00,000/- as unexplained cash credit without appreciating the materials brought on record and facts evaluated by the Assessing Officer in the Assessment Order ? ii) Whether the Learned Income Tax Appellate Tribunal has committed substantial error in law in upholding the order of the Commissioner of Income Tax (Appeals) deleting the addition made under Section 69C of the Income Tax Act, 1961 on account of interest expenses on such unsecured loan ? We have heard Mr. Tilak Sharma, learned standing counsel appearing for the appellant and Mr. Amit Agarwal, learned counsel appearing for the respondent. The Department was unsuccessful in their challenge before the learned Tribunal wherein they questioned the correctness of the order passed by the Commissioner of Income Tax (Appeals) - 27, Kolkata [CIT(A)] on 14 th June, 2023. By the said order, the [CIT(A)] allowed the appeal filed by the assessee and set aside the addition made by the Assessing Officer by invoking power under Section 68 of the Act. As could be seen from the order passed by the learned Tribunal, the Tribunal has examined the factual details after noting the factual findings recorded by the [CIT(A)], more importantly, the learned Tribunal found that all the loans stood repaid, which has also been factually ascertained by the [CIT(A)] and re-affirmed by the Tribunal. We find the order passed by the [CIT(A)] to be an elaborate order after discussing all the facts. The learned Tribunal has, in fact, quoted the relevant portions of the order passed by the [CIT(A)] and thereafter independently proceeded to examine the correctness of the finding and affirmed the same. Thus, we are of the view that no questions of law, much less substantial questions of law arises for consideration in this appeal. Hence, the appeal fails and the same is dismissed. 7.6 Going over the discussion made above and considering the judicial pronouncements, we find that the ld. CIT(A) has elaborately discussed everything and thereafter, passed the impugned order in favour of the Century Aluminium MFG Company Ltd assessee considering the judicial precedents. We, therefore, do not find any infirmity in the order of the ld. CIT(A) and the same is upheld. Accordingly, the appeal of the revenue is dismissed.

Kolkata, the 17th December, 2025.