LUMINO INDUSTRIES LIMITED,KOLKATA vs. D.C.I.T., CC - 2(3),, KOLKATA

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ITA 2083/KOL/2025Status: DisposedITAT Kolkata02 December 2025AY 2020-2021Bench: SHRI RAJESH KUMAR, AM\nAND\nSHRI PRADIP KUMAR CHOUBEY, JM\nITA No. 2083/KOL/2025\n(Assessment Year: 2020-21)\nLumino Industries Limited\nUnit No.12/4, Merlin Acropolis,\n1858/1, Rajdanga Main Road,\nKolkata Township,\nKolkata-700107, West Bengal\n(Appellant)\nVs.\nDCIT, CC 2(3)\nAayakar Bhawan Poorva,\n110, Shanti Pally,\nE.M. Bypass, Kolkata-700107,\nWest Bengal\n(Respondent)\nPAN No. AABCL0720E\nAssessee by\n:\nShri Soumitra Choudhury &\nMs. Nandini Sureka, Ars\nRevenue by\n:\nShri P.N. B4 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had provided all documentary evidence for the loan from Eiffel Agencies Pvt. Ltd. to both the AO and the CIT(A). The authorities did not identify any specific defects or discrepancies in these documents. Their reasoning for the addition was primarily based on the lender company's low operating profit, lack of fixed assets, or low expenses, and its alleged status as a 'Jamakarchi Company'. The Tribunal cited the case of CIT vs. Ms. Mayawati, which held that low income or lack of fixed assets of a creditor is not a sole criterion for disallowing a loan. Furthermore, the Tribunal relied on the jurisdictional High Court's decision in PCIT vs. Sreeleathers, which stated that if an assessee furnishes all evidence and the AO does not conduct further inquiry, no addition can be made. The Tribunal found the AO's order to be perverse. Consequently, the Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition of ₹15,00,000. As the second issue regarding interest disallowance was consequential, it was also set aside, and the AO was directed to delete that addition as well. The appeal of the assessee was allowed.

What were the facts?

The assessee, Lumino Industries Limited, is appealing an order from the Commissioner of Income-tax (Appeals) for Assessment Year 2020-21. The appeal challenges the addition of ₹15,00,000 as an unexplained cash credit under Section 68 of the Income Tax Act, related to a loan from Eiffel Agencies Pvt. Ltd. (EAPL). The assessee's return declared a total income of ₹128,90,00,980. The assessment was framed under Section 143(3) after a search action under Section 132 on the Goel Group, of which the assessee is a flagship company. A notice under Section 148 was issued, and the assessee filed a revised return. The Assessing Officer (AO) noted that during the search, papers indicated the assessee received unsecured loans and paid interest from shell entities. The AO identified two loans: ₹45 lacs from Godavari Vyapaar Pvt. Ltd. and ₹15 lacs from Eiffel Agencies Pvt. Ltd. EAPL was identified as a 'Jamakarchi Company,' leading to the addition, despite the assessee providing evidence. The CIT(A) confirmed the addition, noting EAPL's low net worth and profits.

What were the issues?

1. Whether the addition of ₹15,00,000 as an unexplained cash credit under Section 68 of the Income Tax Act is justified, considering the assessee provided evidence of the loan from Eiffel Agencies Pvt. Ltd. (EAPL)? - Assessee's contention: The assessee argued that all necessary evidence regarding the loan from EAPL was furnished to the AO and CIT(A). The authorities failed to point out any defect or discrepancy in these documents, relying solely on search team reports suggesting accommodation entries. The assessee relied on the principles laid down in CIT vs. Ms. Mayawati and PCIT vs. Sreeleathers. - Revenue's contention: The revenue, through the AO and CIT(A), considered EAPL to be a shell entity based on its low profitability and net worth, and its inclusion in a list of 'Jamakarchi Companies', thus treating the loan as an unexplained cash credit. 2. Whether the disallowance of interest amounting to ₹13,315 paid to EAPL is justified? - Assessee's contention: This issue is consequential to the first ground, and if the addition under Section 68 is deleted, the disallowance of interest should also be deleted. - Revenue's contention: Not recorded.

Which sections of the Income-tax Act were involved?

Section 68,Section 132,Section 143(3),Section 148,Section 133(6)

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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Shri Soumitra Choudhury &, Ms. Nandini Sureka, Ars
For Respondent: Shri P.N. Barnwal, DR
Hearing: 12.11.2025Pronounced: 02.12.2025

This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals), Kolkata-26, (hereinafter referred to as the “Ld. CIT(A)”] dated 14.07.2025 for the AY 2020-21.

2.

The issue raised in ground no.2 is against the order of learned CIT (A) confirming the addition of ₹15,00,000/- as made by the learned AO on account of unexplained cash credit u/s 68 of the Act in respect of loan taken from the EAPL.

2.1. The facts in brief are that the assessee filed the return of income on 16.01.2021, declaring total income of ₹128,90,00,980/-. The assessment was framed u/s 143(3) vide order dated 30.09.2022,

2.2. In the appellate proceedings, the learned CIT (A) dismissed the appeal of the assessee by observing that the lender company has net worth of ₹10 crores and has shown profit of less than 1 lacs from operation. The learned CIT (A) noted that in 2018-19, the said

2.3. After hearing the rival contentions and perusing the materials available on record, we find that the assessee filed all the evidences before the learned AO as well as before the learned CIT (A). The documents qua the loan raised from Eiffel Agencies Pvt. Ltd. and the authorities have failed to point out any defect or discrepancy in the same and mainly relied on the report of the search team that the assessee has received accommodation entries through these companies. In our opinion, mere fact that the loan creditors company had low income in the form of operating profit or no fixed assets or incurred very low expenses is not the criteria as has been held in the case of CIT vs. Ms. Mayawati 338 ITR 563 dated 03.08.2011. Also, the Hon’ble Hurisdictional High Court in case of PCIT vs. Sreeleathers [2022] 143 taxmann.com 435 (Calcutta)/[2022] 448 ITR 332 (Calcutta)[14-07-2022], has held that where the assessee has furnished all the evidences with the AO and then no addition can be made if /ao has not done any enquiry. The Hon’ble Court has held as under:

“‘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]’

3.

The second issue raised by the assessee is against the confirmation of addition of disallowance of interest amounting to ₹13,315/- paid to EAPL which was disallowed by the learned AO. This issue is consequential to the ground no.2, and accordingly, the order of learned CIT (A) is set aside and AO is directed to delete the addition.

4.

In the result, the appeal of the appeal of the assessee is allowed.

Order pronounced in the open court on 02.12.2025.

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