FALGUNI NEVATIA,KOLKATA vs. ITO, WARD 33(4), KOLKATA

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ITA 941/KOL/2024Status: DisposedITAT Kolkata04 November 2025AY 2012-135 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 addition of ₹1,86,50,058 made by the AO and sustained by the CIT(A) was against the provisions of the Act. The Tribunal noted that the assessee had filed details of loan creditors, including their names and addresses, ITR acknowledgements, final accounts, bank statements, and confirmations. The loan creditors had also complied with the notices issued under Section 133(6) and summons under Section 131 of the Act. The Tribunal observed that Section 69A deals with unexplained money not recorded in the books of account and is not applicable to unsecured loans. The Tribunal found that the assessee had discharged its onus, and the onus had shifted to the department. The Tribunal relied on the decision of the Hon'ble Calcutta High Court in Pr. CIT-9, Kolkata vs. Sreeleathers, which held that in the absence of any adverse findings, orders treating loans as unexplained were perverse. The Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition.

What were the facts?

The assessee, Falguni Nevatia, is in appeal against the order of the National Faceless Appeal Centre, Delhi (NFAC), dated March 21, 2024, for Assessment Year 2012-13. The Assessing Officer (AO) reopened the assessee's case under Section 147 of the Income-tax Act, 1961 (the Act) based on information from the Director of Income Tax (Investigation) regarding a credit of ₹1,68,67,145 in the assessee's Yes Bank account. The AO issued a notice under Section 148, to which the assessee complied by filing a revised return. The assessee provided details of unsecured loans from 14 private limited companies. The AO issued notices under Section 133(6) and summons under Section 131 to the loan creditors, which were complied with. Despite this, the AO treated an amount of ₹1,86,50,058 as unexplained money under Section 69A and added it to the assessee's income. The CIT(A) upheld the AO's order.

What were the issues?

1. Whether the addition of ₹1,86,50,058 on account of unsecured loans as unexplained money under Section 69A of the Income-tax Act, 1961, is justified, considering the assessee provided details of loan creditors, their ITR acknowledgements, final accounts, bank statements, and confirmations, and the loan creditors complied with notices under Section 133(6) and summons under Section 131 of the Act. Assessee's contentions: The assessee argued that it had discharged its onus by filing all necessary details regarding the loan creditors. The AO's action of treating the loan amounts as unexplained money under Section 69A was incorrect as the section is not applicable to unsecured loans. The assessee relied on the decision of the Hon'ble Calcutta High Court in Pr. CIT-9, Kolkata vs. Sreeleathers. Revenue's contentions: The judgment records no specific contentions for the revenue, other than their representative being present.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 148,Section 133(6),Section 131

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

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

For Appellant: Shri Siddarth Agarwal, AR
For Respondent: Shri Subrata Aich, DR
Hearing: 15.09.2025Pronounced: 04.11.2025

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 21.03.2024 for the AY 2012-13.

2.

At the time of hearing, the ld. Counsel for the assessee pressed ground no.6, which is against the order of ld. CIT (A) upholding the order of ld. AO wherein the ld. AO made an addition of ₹1,86,50,058/- on account of unsecured loans by invoking the Provisions of Section 69A of the Income-tax Act, 1961 (the Act)

4.

The ld. CIT (A) also dismissed the appeal of the assessee by upholding the order of the ld. AO by rejecting the submissions of the assessee.

5.

We have heard the rival submissions and perused the materials available on record. We note that the assessee has filed the details of loan creditors along with names and addresses, copies of ITR acknowledgements, final accounts, bank statements and conformations etc in respect of loan creditors. We also note that the ld. AO issued notices u/s 133(6) of the Act which were duly complied “69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Income-tax Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year."

6.

A perusal of Section 69A of the Income-tax Act, 1961 (the Act) makes it adequately clear that the section is applicable if any money, bullion, jewellery or valuation article of which the assessee is found to be owner and the said money is not recorded in the books of account of the assessee if any maintained and the assessee offer no explanation about the nature and source thereof. Therefore, even on this count the order of the ld. AO is wrong and cannot be sustained. We note that the ld. CIT (A) upheld the order of the ld. AO by ignoring the facts on record. In our opinion, the assessee has discharged its onus by filing all the details qua the loan creditors before the ld. AO as well as before the ld. CIT (A) and the onus has shifted to the department.

‘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]’ 07. We respectfully following the decision of the Hon'ble High Court set aside the order of the ld. CIT (A) and direct the ld. AO to delete the addition.

8.

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

Order pronounced in the open court on 04.11.2025.

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