DCIT, CENTRAL CIRCLE - 4(4), KOLKATA, KOLKATA vs. VIKAS KUMAR AGRAWAL, KOLKATA

Brief facts of the case of the assessee are that the assessee filed its return of income for AY 2017-18 declaring total income of Rs. 9,54,420/-. The assessment of the assessee was reopened in pursuant to the decision of Hon’ble Supreme Court in the case of Union of India & Ors. Vs. Asish Kumar Agarwal. The assessee has been asked to Assessment Year: 2017-18 Vikash Kumar Agrawal comply the notices issued u/s 148 of the Act but there was no compliance on behalf of the assessee as a result of which the AO has assessed the income of the assessee by adding Rs. 8,00,070/- by holding that the assessee had nothing to explain regarding the credit of Rs. 8,00,070/-.

Aggrieved by the said order the assessee has preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been allowed on merit by holding that the assessee has discharged its onus by providing details of aforesaid loan creditor from the creditor to verify the veracity of the loan taken and directed the AO to delete the addition of Rs. 8,00,070./-.

The ld. D.R challenges the impugned thereby submitting that the Ld. CIT(A) has erred in deleting the disallowed bogus unsecured loan amounting to Rs. 8,00,070/- taken from a shell company namely M/s Gopalpriya Commercial Pvt. Ltd. had used the syndicate of paper/shell companies of Banka Group. The Ld. D.R has further submitted that the nature of the case related to the accommodation entry falling within the exceptional clause (h) of the para no. 3.1 of filing of appeal as per CBDT circular no. 5/2024 dated 15.03.2024.

Contrary to that, the Ld. A.R has firstly argued that the tax effect is below the monetary limit and there is nothing in the impugned order to establish the appeal of the revenue has been covered under the exceptional clause (h) of CBDT Circular NO. 5/2004. The Ld. Counsel further submits that the Ld. CIT(A) has rightly been held that the loan amount was returned in the same period and the assessee has furnished several documents to establish creditworthiness and genuineness of the parties. The Ld. A.R submits that there is no illegality in the impugned order.

Upon hearing the submission of the counsel of the respective parties, we have perused the record of the assessee as well as the order passed by the Ld. CIT(A). As per the assessment order, the assessee has used the syndicate of paper /shell companies of Assessment Year: 2017-18 Vikash Kumar Agrawal Banka Group. The AO has held that the assessee has failed to prove the identity, creditworthiness of the parties and genuineness of the transactions by filing necessary evidences. On perusal of the order of Ld. CIT(A), it appears to us that Rs. 4,00,000/- was taken as loan but the same was returned immediately in the same year and the amount was repaid in nine days only. The assessee has filed following documents which are as follows: a) Copy of ledger a/c in the books of GPCPL b) Copy of confirmation of a/cs. c) Copy of relevant Bank statement of GPCPL d) Copy of ITR acknowledgement of GPCPL e) Copy of relevant bank statement of the appellant.

The Ld. CIT(A) in its order held which are essential to reproduce the same here in below-:

It appears to us that the AO did not find any cash deposit or cash trail during the assessment proceedings. It is pertinent to mention herein that the loan was repaid by the assessee to M/s GPCPL in the same FY i.e. 2016-17.