DCIT, CIRCLE-1, SILIGURI vs. VAISHNODEVI BUILDCON PRIVATE LIMITED, SILIGURI

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ITA 1383/KOL/2025Status: DisposedITAT Kolkata06 November 2025AY 2018-19Bench: SHRI GEORGE MATHAN (Judicial Member), SHRI RAJESH KUMAR (Accountant Member)5 pages

AI SummaryDismissed

Facts

The assessee's assessment for AY 2018-19 was reopened based on information that an unsecured loan of ₹2,50,00,000/- from M/s Shivaangan Merchandise Pvt. Ltd. was unexplained. The Ld. AO added this amount under Section 68 and also disallowed interest of ₹8,46,061/- paid on the loan under Section 69C, alleging the lender was a shell company. The Ld. CIT(A) subsequently deleted both additions.

Held

The Tribunal upheld the Ld. CIT(A)'s decision, dismissing the Revenue's appeals. It was held that the assessee had provided sufficient evidence (confirmations, bank statements, IT returns of the lender, lender active on ROC portal) to prove the genuineness of the loan. The Ld. AO's failure to conduct independent enquiries and reliance solely on suspicion rendered the additions under Section 68 and 69C unjustified.

Key Issues

1. Whether the addition of unsecured loan under Section 68 of the Income Tax Act, 1961, as unexplained cash credit was justified. 2. Whether the disallowance of interest paid on the unsecured loan under Section 69C of the Income Tax Act, 1961, as unexplained expenditure was justified.

Sections Cited

68, 147, 148(1), 148A(b), 148A(d), 148, 144B, 143(3), 69C, 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, KOLKATA

Before: SHRI GEORGE MATHAN, JM & SHRI RAJESH KUMAR, AM

For Appellant: Shri Soumitra Choudhury &, Shri Pranabesh Sarkar, Ars

For Respondent: Shri S.B. Chakraborthy, DR

Hearing: 28.08.2025Pronounced: 04.11.2025

These are the appeals preferred by the Revenue against the orders of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 16/04/2025 for the AY 2018-19.

02. The only issue raised by the Revenue is against the deletion of addition of ₹2,50,00,000/- by the ld. CIT (A) as made by the ld. AO on account of unexplained cash credit u/s 68 of the Income-tax Act, 1961 (the Act) in respect of unsecured loans raised by the assessee during the year.

In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee after taking into consideration the reply/ submission of the assessee.

After hearing the rival contentions and perusing the materials available on record, we find that the assessee during the year has raised an unsecured loan of ₹2,50,00,000/- from M/s Shivaangan 06. The issue raised in is in respect of interest of ₹8,46,061/- which was deleted by the ld. CIT (A) by reversing the order of the ld. AO, wherein the said interest was added to the income of the assessee as unexplained expenditure u/s 69C of the Act. Pertinent to state that interest was paid on the loan of ₹2,50,00,000/- taken from M/s Shivaangan Merchandise Pvt. Ltd. Since, we have upheld the order of ld. CIT (A) by dismissing the appeal of the Revenue on the issue of unsecured loan by holding that the ld. CIT (A) has rightly deleted the addition after taking into consideration the reply and submission of the assessee and evidences filed in connection therewith. This being a consequential issue to our decision in and accordingly, the appeal of the Revenue is dismissed by upholding the order of ld. CIT (A) on this issue. Noteworthy to state that this appeal has emanated from the order of ld. CIT (A) which was passed in the context of order passed by the ld. AO u/s 154 of the Act.