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Facts
The assessee, Bagla Agro Limited, filed returns of income, and subsequently, a search action was conducted. The Assessing Officer (AO) made an addition of ₹1,70,607/- for non-genuine interest paid on a loan to M/s Chordia Trade Credits Pvt. Ltd., identified as a shell company, which was later confirmed by the Ld. CIT(A). The assessee also faced a delay of 174 days in filing the appeal before the Tribunal.
Held
The Tribunal condoned the delay in filing the appeal, finding the reasons provided by the assessee to be sufficient and bona fide. Regarding the merits, the ITAT observed that the loans and related interest payments from M/s Chordia Trade Credits Pvt. Ltd. were accepted in prior assessment years without dispute, and no incriminating material was found during the search action. Consequently, the Tribunal deleted the addition made by the AO and confirmed by the Ld. CIT(A).
Key Issues
1. Whether the delay in filing the appeal should be condoned. 2. Whether the addition made by the Assessing Officer for non-genuine interest paid on a loan was justified.
Sections Cited
139(1), 132(1), 270A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRI SONJOY SARMA, JM
O R D E R Per Rajesh Kumar, AM:
These are appeals preferred by the assessee against the orders of the Commissioner of Income-tax (Appeals), Kolkata-27 (hereinafter referred to as the “Ld. CIT(A)”] even dated 15.03.2024 for the AY 2019-20 & 2021-22.
At the outset, we note that there is delay of 174 days for which condonation petition along with affidavit was filed, explaining the reasons for delay. It was stated in the affidavit that the appellate orders passed ex-parte and unaware of the impugned ex-parte of the order as not received any notice of hearing vide email, which is general mode of communication. It was only come to notice while updating list of pending appeal for the purpose of finalization of accounts. It was only after the fact was noticed from the portal qua
The ld. DR on the other hand strongly opposed the condonation of delay on the ground that the delay is not properly explained.
After hearing the rival contentions and perusing the materials available on record, we find that the reasons for delay appear to be sufficient and bonafide and accordingly, the delay is condoned.
2203/KOL/2024 for A.Y. 2021-22
The only issue raised by the assessee is against the order of ld. CIT (A) confirming the addition of ₹1,70,607/- as made by the ld. AO on account of interest on loan paid to M/s Chordia Trade Credits Private Limited.
The facts in brief are that the assessee filed the return of income u/s 139(1) of the Act on 04.02.2022, declaring total income of Nil and current liabilities of ₹1,73,512/-. A search action u/s 132(1) of the Act was conducted on assessee on 05.10.2021 and accordingly, notices were issued and served upon the assessee. During the course of assessment proceedings, the ld. AO has debited ₹1,70,607/- by way of interest which according to the ld. AO was bogus as the same was paid to a shell company M/s Chordia Trade Credits Pvt. ltd. as included in the data base by the DIT(Inv), Kolkata. Accordingly, the same was treated as non-genuine and added to the income of the assessee.
In the appellate proceedings, the ld. CIT (A) on his order dismissing the appeal of the assessee by observing and holding as under:-
2204/KOL/2024 for A.Y. 2019-20
The issue raised in this appeal is similar to one as decided by us in ITA No. 2203/KOL/2024. Accordingly, our decision would apply mutatis
In the result, both the appeals of the assessee are allowed.
Order pronounced in the open court on 04.03.2025.