DCIT, CENTRAL CIRCLE-4(3), KOLKATA, KOLKATA vs. ARUN ENGINEERING UDYOG PRIVATE LIMITED , KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRIPRADIP KUMAR CHOUBEY, JM DCIT, Central Circle 4(3), Kolkata Aaykar Bhawan Poorva, 110 Shantipally, Kolkata-700107 West Bengal Vs. Arun Engineering Udyog Private Limited 151, A, Cotton Street Burrabazaar Kolkata-700007, West Bengal (Appellant) (Respondent) PAN No. AALCA8127A
Per Rajesh Kumar, AM: This is an appeal preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals), Kolkata-27(hereinafter referred to as the “Ld. CIT(A)”] dated 13.04.2025 for the AY 2022-23. 2. The only issue raised by the assessee is against the order of ld. CIT (A) deleting the addition of ₹40 lacs as made by the ld. AO in respect of bogus unsecured loan as unexplained cash credit. 2.1. The facts in brief are that the assessee filed the return of income on 24.09.2022, declaring total income of ₹5,61,390/-. The return was selected for scrutiny and accordingly notice u/s 143(2) and 142(1) of the Act along with questionnaire were issued and duly served upon the assessee. The ld. AO during the course of Arun Engineering Udyog Private Limited; A.Y. 2022-23
assessment proceedings observed on the basis of evidences filed by the assessee that ₹46.00 lacs were borrowed from two parties namely; Mainland finance Pvt. Ltd. of ₹27.00 lacs and M/s Jajodia finance Ltd. of ₹19.00 lacs. The assessment was framed u/s 143(3) of the Act vide order dated 22.03.2024, assessing the income at ₹51,61,390/- by adding ₹46.00 las as non-genuine loan u/s 68 of the Act. Thereafter, the assessee challenged the order before the Hon'ble
Kolkata High Court and Hon'ble Kolkata High Court has remanded the matter back to the file of the ld. AO to pass a fresh order. The ld. AO accordingly issued the assessee necessary notices and thereafter again made the addition of ₹46.00 lacs in the assessment framed u/s 143(3) / 260 of the Act vide order dated 26.06.2024. The ld. AO on page no.26 at para no.9.5 recorded a finding of fact that the assessee has repaid the loan subsequently along with interest.
2.2. In the appellate proceedings, the ld. CIT (A) deleted the addition after recording a finding of fact that assessee has furnished all the evidences before the ld. AO in respect of loan creditors and the ld.
AO has not done any further enquiry or dealt with the same by relying on the decision of Hon'ble Juri ictional High Court in case of Principal Commissioner of Income-tax vs. Sreeleathers [2022] 448
ITR 332 (Calcutta) vide order dated 14-07-2022. In addition, the ld.
CIT (A) relied on other decisions namely; CIT Vs. M/s Dataware
Private Limited (2011) (9) TMI 175 (Calcutta) and various other decisions and deleted the addition.
2.3. After hearing the rival contentions and perusing the materials available on record, we find that in this case the ld. AO made an addition in respect of unsecured loans of ₹46.00 Lacs from two loan creditors. During the course of assessment proceedings, we note that Arun Engineering Udyog Private Limited; A.Y. 2022-23
the assessee furnished before the ld. AO all the evidences/
documents qua the loan creditors . The ld. CIT (A) discussed the issue at length in the appellate order while deleting the addition as made by the ld. AO. We note that the AO framed the assessment dated 22.03.2024 by adding ₹46.00 las as non-genuine loans u/s 68
of the Act. Thereafter, the assessee challenged the order before the Hon'ble Kolkata High Court and Hon'ble Kolkata High Court has remanded the matter back to the file of the ld. AO to pass a fresh order. The ld. AO accordingly issued the assessee necessary notices and thereafter again made the addition of ₹46.00 lacs in the assessment framed u/s 143(3) / 260 of the Act vide order dated
26.06.2024. The ld. AO on page no.26 at para no.9.5 recorded a finding of fact that the assessee has repaid the loan subsequently along with interest. We also note that the assessee has filed all the evidences before the ld. AO and therefore, making the addition merely on the ground that the creditors were shell companies, which is not correct. The ld. CIT (A) has rightly deleted the addition in respect of unsecured loan of ₹46.00 by relying on the decision of PCIT Vs. Sreeleather [448 ITR 332] dated 14.07.2022 wherein
Hon’ble Court has held :
‘In the absence of any such finding, it is held that the order passed by the Assessing Officer was utterly perverse and rightly interfered by the Commissioner (Appeals). The Tribunal re-appreciated the factual position and agreed with the Commissioner (Appeals). The Tribunal apart from taking into consideration, the legal effect of the statement of AKA also took note of the fact that the notices which were issued by the Assessing Officer under section 133(6) to the lenders where duly acknowledged and all the lenders confirmed the loan transactions by filing the documents which were placed before the tribunal in the form of a paper book. These materials were available on the file of the Assessing Officer and there is no discussion on this aspect. Thus, the tribunal rightly dismissed the appeal filed by the revenue. [Para 5]’
02. Similarly, the case of the assessee is squarely covered by the decisions The case of assessee is squarely covered by the decisions of Arun Engineering Udyog Private Limited; A.Y. 2022-23
the Hon’ble Calcutta High court in number of cases namely PCIT-2,
Limited in ITAT/133/2025, IA No.GA/2/2025 vide order dated 05.08.2025, PCIT
Vs. M/s Narayan Tradecom Pvt. ltd. in ITAT/76/2025, IA No.
GA/1/2025 dated 10.06.2025, PCIT Vs. Alom Extrusions Ltd.
ITAT/268/2024, IA no. GA/1/2024, GA/2/2024 dated 17.12.2024,
PCIT Vs. M/s Edmond Finvest Pvt. ltd., in ITAT/28/2024, GA/2/2024
dated 26.02.2024, PCIT Vs. Parwati Lakh Udyong, ITAT/2/2024, IA
No.GA/1/2024 dated 19.02.2024. In all the above decisions the Hon'ble court has held that where the assessee has filed all the evidences qua the loan creditors before the ld. AO and loans are also repaid then the same cannot be added us/ 68 of the Act. Similarly, the case of assessee is squarely covered by the decision of the Hon’ble
Gujarat High Court in the case of Ambe Tradecorp (P.) Ltd., reported in [2022] 145 taxmann.com 27 (Gujarat), wherein it has been held as under :-
"3. The issue in this case arose in respect of the assessment year 2012-2013. It appears that the two loan transactions of Rs. 8,50,00,000/- and Rs. 23,70,00,000/- received by respondent assessee from one M/s. J.A Infracon Private Limited and M/s.
Satya Retail Private Limited were treated by assessing officer to be sham in the sense that the creditworthiness etc. of the giver of the loan were not established.
Accordingly, the assessing officer made addition under section 68 of the Act.
1 While the assessing officer dealt with unexplained cash credit from the M/s. Satya Retail Private Limited and from M/s. J.A Infracon Private Limited in his order in paras 5.1 and 5.2 respectively, the Commissioner of Income-tax in the appeal preferred by assessee found on facts and the material before it that the said two cash creditors had been holding there identity, creditworthiness and genuineness in respect of the loan transactions.
2 The appellate authority observed that, "In this regard, it has been noticed that ledger accounts and confirmations of the aforesaid two parties have been provided by the appellant to the AO in the assessment proceedings. Thereafter, the AO also carried Arun Engineering Udyog Private Limited; A.Y. 2022-23
out the independent inquiries u/s. 133(6) of the I.T. Act and in compliance thereto both the companies have submitted the requisite information."
3 The information supplied by assessee was duly noticed by appellate authority and facts in that regard were recorded also to arrive at a finding that the unsecured loans to the aforesaid parties have been paid by account payee cheques from the bank account of the assessee which was not in dispute, muchless in doubt. The accounts were finally settled with the repayment of the loan to the lender companies. 3.4 When the revenue preferred appeal before the Appellate Tribunal, the Tribunal confirmed the findings recorded by the Appellate Authority. The Tribunal referred to the decision of Durga Prasad More (82) ITR 540 and also in Sumati Dayal (214) ITR 801, to further record on the basis of the facts that the assessee had furnished the details such as copy of ledger account, bank statements, income tax returns, balance sheet etc. It was also recorded that notice under Section 133(6) of the Act was issued to the said parties which were duly responded by them. The identity of the parties could not be, therefore disputed, recorded the tribunal. The aspect was also noticed that the assessee was not beneficiary of the loan received by it and the loan was repaid by the assessee in the subsequent year. It led to unacceptable conclusion that the impugned transaction was a business transaction between the assessee and the loan parties and that they could not be doubted for their genuineness. 3.5 While the revenue has tried to put up a case that the transactions were in the nature of accommodation entries, this case has only presumptive and assumptive value not supported by any factual data. On the contrary, on the basis of the material before the authorities, the transactions were found to be genuine. 4. Learned advocate for the appellant attempted to emphasize that for the purpose of application of Section 68 of the Act, three ingredients were necessary. Firstly identity of the parties to the transaction of loan, second is the creditworthiness of such parties and thirdly the genuineness of the transaction. It was submitted in vain that neither of the ingredients were satisfied. 5. As discussed above, since the requisite material was furnished by assessee showing the identity and since the assessee was not beneficiary when the loan was repaid in the subsequent year, even the ingredients of creditworthiness and genuineness of transaction were well satisfied. 6. The Tribunal rightly recorded in para 29 of the judgment, "Once repayment of the loan has been established based on the documentary evidence, the credit entries cannot be looked into isolation after ignoring the debit entries despite the debit entries were carried out in the later years. Thus, in the given facts and circumstances, were hold that there is no infirmity in the order of the Ld.CIT-A. " 7. For the reasons recorded above, no question of law muchless substantial questions arises in this appeal. It stands meritless and accordingly dismissed. Arun Engineering Udyog Private Limited; A.Y. 2022-23
Considering the facts of the case before us in the light of the above decisions , we are inclined to uphold the appellate order on this issue by dismissing the revenue appeal. 04. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 18.12.2025. (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER)
Kolkata, Dated: 18.12.2025
Sudip Sarkar, Sr.PS
Copy of the Order forwarded to:
BY ORDER,//
Sr. Private Secretary/ Asst.