DCIT, KOLKATA vs. M/S NEW CHARAN KANWAL FINANCE COMPANY PVT. LTD., KOLKATA

Per Pradip Kumar Choubey, JM:

This is an appeal preferred by the Revenue against the order of the Commissioner of Income-tax (Appeals), Kolkata-26 (hereinafter referred to as the “Ld. CIT(A)”] dated 31.12.2024 for the AY 2020-21. 02. Brief facts of the case are that the assessee being a company filed the return of income for the assessment year 2020-21, declaring total income at ₹25,27,240/-. A search and seizure operation were conducted in case of Balaji Group. A notice u/s 153A was issued and in compliance to the same assessee filed the return and submitted various documents. The ld. AO passed the assessment order assessing the income of the assessee at ₹31,15,000/- as unexplained cash credit u/s M/s New Charan Kanwal Finance Company Pvt. Ltd; A.Y. 2020-21

68 of the Act read with section 115BBE of the Act, being unsecured loan taken by the assessee. Aggrieved by the said order assessee preferred the appeal before the ld. CIT (A), wherein the appeal of the assessee has been allowed.
03. Being aggrieved and dissatisfied by the Revenue preferred an appeal.
04. The ld. DR challenges the very impugned order thereby submitting that the ld. CIT (A) has erred in deleting the addition ignoring the fact that the assessee has failed to prove the identity and creditworthiness of the party. The ld. DR has further challenged that the ld. CIT (A) erred in ignoring that assessee has admitted the fact in respect of receipt of ₹31,15,000/- as unsecured loan in F.Y. 2019-20, whereas it misreported the fact during the appellate proceedings by claiming that it was not received of loan rather it was refund of loan received in earlier years. The ld. DR has further submitted that monetary limit for file appeal before the ld. ITAT as prescribed by the CBDT Circular is not applicable in the present case as the case falls under the exceptional laws.
05. Contrary to that, the ld. AR support the impugned order thereby submitting that loans were received through proper banking channels and it was repaid. It has further been argued by the ld. AR that the assessee given a loan of ₹31,15,000/- in the earlier year and the borrow
M/s Popular Tie-up Pvt. Ltd has repaid the same with interest in the current year and both the transactions were executed through account payee cheque. The ld. AR supports the impugned order of the ld. CIT
(A).
06. Upon hearing the submissions of the counsel of the respective parties we have perused the impugned order and find that assessee company
M/s New Charan Kanwal Finance Company Pvt. Ltd; A.Y. 2020-21

had provided an unsecured loan of ₹₹31,15,000/- to one of its group entities M/s Popular Tie-up Pvt. Ltd. during the preceding previous year and the current year (F.Y. 2019-20). The assessee had received the sum along with interest as full repayment of loan. It is pertinent to mentioned here that the company M/s Popular Tie-up Pvt. Ltd., having its registered office at Kolkata. The amount credited in the books for such repayment of the loan was assessed u/s 68 of the Act in the assessment made u/s 153A/ 143(3) of the Act. The bare company is regular filer of the return and having a net worth of ₹3,38,71,195/-.
The assessee company was holding NBFC certificate from RBI. The following documents has been submitted by the assessee in respect of the money receipt as repayment of the loan: -
“1. Loan confirmation in the year of taking loan (Filed before AO)
2. Loan confirmation in the year of loan repayment (Filed before AO)
3. Audited Accounts of the Payer (Filed before AO)
4. Income Tax Return of the Payer (Filed before AO)
5. Bank Statement of the Payer (Filed before AO)
6. Intimation u/s 143(1) of the IT Act.”
07. We have also gone through the submission made by the assessee before the ld. CIT (A) which had been tabulated by the ld. CIT (A) in its order, which is as follows: -
A.Y. / Date
Loan given to Popular Tie-up
Pvt. Ltd.
Loan repaid
Interest
TDS
Closing
2020-21

₹31,15,000/-

Nil
08. Going over the order passed by the ld. CIT (A), we do not find any infirmity in the impugned order as it appears from the above table that the assessee in F.Y. 2019-20, relevant to A.Y. 2020-21, had advanced
M/s New Charan Kanwal Finance Company Pvt. Ltd; A.Y. 2020-21

loan of ₹31,15,000/- to M/s Popular Tie-up Pvt. Ltd. and the same was refunded back to the M/s Popular Tie-up Pvt. Ltd. on 16.03.2020. Accordingly, the appeal of the Revenue is hereby dismissed.
09. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open court on 23.06.2025. RAKESH MISHRA
(PRADIP KUMAR CHOUBEY)
(ACCOUNTANT MEMBER)
(JUDICIAL MEMBER)

Kolkata, Dated: 23.06.2025
Sudip Sarkar, Sr.PS
Copy of the Order forwarded to:
1. The Appellant
2. The Respondent
3. CIT
4. DR, ITAT,
5. Guard file.
BY ORDER,//

Sr. Private Secretary/ Asst.