DCIT, CC-2(3), KOLKATA, KOLKATA vs. DAILMER INDUSTRIES PRIVATE LIMITED, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA SHRI RAJESH KUMAR, ACCOUNTANT MEMBER PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER

I.T.A. No. 2921/Kol/2025 (Assessment Year 2020-2021) & I.T.A. No. 2922/Kol/2025 (Assessment Year 2022-2023)

DCIT, CC-2(3), Kolkata, Office of the DCIT,CC-2(3), Kolkata, Aayakar Bhawan Poorva, 4th Floor, 110, Shantipally, E.M. Bypass, Kolkata - 700107 …..…...…………….... Appellant

vs. Dailmer Industries Private Limited, 67C, Balaram Dey Street, Beadon Street, S.O. Kolkata - 700006 [PAN: AABCD0836D] …..…...…………….... Respondent Appearances by: Assessee represented by : Soumitra Choudhury, Advocate Nandini Sureka, Advocate Pranabesh Sarkar, Advocate Department represented by : Sanjib Kumar Paul, Addl. Sr. DR

Date of concluding the hearing : 17.02.2026 Date of pronouncing the order : 06.03.2026 O R D E R Per Rajesh Kumar, AM These two appeals filed by the same assessee are arising from orders even dated 26.08.2025 passed u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) by the Ld. Commissioner of Income Tax (Appeals) Kolkata-26 [hereafter “the Ld. CIT(A)] for assessment year 2020-21 &

2 ITA Nos. 2921 & 2922/Kol/2025 Dailmer Industries Private Limited 2022-23 respectively. Since the issue involved in both the appeals are common and were heard together, therefore both these appeals are decided by this common order for the sake of convenience. We would first take up appeal ITA No. 2921/Kol/2025 as the lead case.

ITA No. 2921/Kol/2025

3 ITA Nos. 2921 & 2922/Kol/2025 Dailmer Industries Private Limited Therefore, the is not searched but incriminating material was found relating to the assessee. Thus, the assessee is other than the searched person. According the notice u/s 148 of the Act was issued on 27.02.2024 which was complied with by filing the return of income o 15.04.2024 as filed originally. During the assessment proceedings, the ld. AO noted that the assessee had borrowed during the year unsecured loans aggregating to Rs. 5,49,50,000/- from 9 parties whereas the opening unsecured outstanding were from 4 parties aggregating to Rs. 1,04,50,000/-. The details were given by the AO in tabular form in page 3 and four of the assessment order. The assessee also paid interested on loan during the year as well as opening unsecured loans amounting to Rs. 22,00,215/- The complete statement of the total loans outstanding on the year end is given by the ld. AO in Para no.6.1 of the assessment order. Thereafter, the ld. AO noted that during the course of search at the residence premises of Shri Navin Kumar Saffar, the laptop, pen drive were seized, wherein the details of unsecured loans from these entities were found. The ld. AO also found that the details of interest paid and commission paid to the brokers were also found therein. The statements u/s 132(4) of the Act of the Accounts Head of Goel Group was recorded, who confirmed that these loans were taken. Besides, the statements of Shri Deepak Goel, one of the Director of Goel Group, who also confirmed the loans was taken by the group company from Shell companies. Finally, the ld. AO noted that Shri Deepak Goel, could not prove the identity and genuineness of the transactions, despite being provided sufficient opportunities and time by the Investigation Wing. Now, the ld. AO relying on the report of the investigation wing and also issuing notice u/s 133(6) of the Act to the lenders from whom the unsecured loans were raised during the year. The assessee also applied to the AO to supply notice issued along with replies received if any from the loan creditors but the same were not supplied to the assessee. Finally, the AO treated the unsecured loans raised during the year as unexplained cash credit u/s 68 of the Act and made an

4 ITA Nos. 2921 & 2922/Kol/2025 Dailmer Industries Private Limited addition of ₹ 5,49,50,000/- to the income of the assessee by relying on the decision of Hon'ble Apex court in the case of CIT v Durga Prasad More (1971) 82 ITR 540(SC) and Sumati Dayal Vs. CIT ((1995) 214 ITR 801 (SC). The ld. AO also disallowed the interest paid by the assessee on unsecured loans including loans which were borrowed in the earlier years as well as during the year amounting to Rs. 22,00,215/-.

“Thus, it was submitted that the appellant company had submitted all the requisite documents and discharged its burden to prove the identity, creditworthiness of the loan creditor and genuineness of the transactions. The said loan creditor has complied with the notice issued under section 133(6) of the Act. There is no finding in the assessment order with respect to aforesaid documents filed at the assessment hearing stage. Thus, I am of the view that the appellant company had discharged its initial burden by submitting supporting's like audited accounts, copy of MCA data, relevant extracts of Bank statements, ledger copy till the repayment of loans, particulars of interest and interest payments and TDS deducted thereon, etc. Thus, the appellant had discharged its initial burden to prove the identity, creditworthiness of the loan creditor and genuineness of the transactions. There is no adverse finding in the assessment order with respect to aforesaid documents filed at the assessment hearing stage Statement of Navin Kumar Saffar There has been discussion in the assessment order with respect to one excel sheet found from the laptop of Navin Kumar Saffar. I find that necessary clarifications have been given by the appellant company at the assessment hearing stage. In my view, the Assessing Officer has irrelevantly referred to the aforesaid document which has no relevance to the impugned additions. In this regard, the appellant also referred to passed by the Hon'ble ITAT. Kolkata in a recent order dated 25.07.2025 in the case of DCIT CC-2(3) vs. Dailmer Industries Pvt Ltd (ITA No. 276/KOL/2025) wherein in the said order dated 25.07.2025, there is reference of alleged excel sheet of Navin Kumar Saffar. In the said case, the CIT(A) vide order dated 22.10.2024 for AY 2021-22 has deleted the additions made by the Assessing Officer. Against the order of the CIT(A), the Department had filed appeal before the Hon'ble ITAT and even the ITAT has dismissed the Department's appeal. Thus, in my view, the Assessing Officer has irrelevantly referred to the aforesaid documents found from the custody of a third party. The said excel sheet does not contain name of the appellant company Even otherwise, the appellate order in other cases discussed above have also held that the said excel sheet does not reflect any accommodation entry transactions Statement of Shri Deepak Goel:

5 ITA Nos. 2921 & 2922/Kol/2025 Dailmer Industries Private Limited At pages 20 to 39 of the assessment order, there has been reference of statement recorded from Shri Deepak Goel, recorded under section 132(4)/131 of the Act on 16.03.2022 and 10.05.2022. I have carefully gone through the submissions of the appellant company with respect to the alleged statements. At the outset, it has been brought to my notice that the said Deepak Goel was not a director of the appellant company and the reply to the statement recorded on 16.03.2022 does not have any significance. Even otherwise, the appellant company clarified that there was no admission on the part of the said Deepak Goel that the transactions represent accommodation entries In my view, necessary rebuttal has been given at the assessment hearing stage with respect to the statements of Deepak Goel. In conclusion, as evident from the discussions above, I am of the view that there is no scope of drawing adverse based on the statements of Deepak Kumar Goel. No incriminating documents have been found during search which could lead to adverse inference been drawn against the appellant company qua the statement of Deepak Goel Repayment of loans in the subsequent year It is seen that the loans have been repaid in the subsequent years with interest. Interest has been duly accounted on year-to-year basis and TDS was duly deducted thereon. In this connection, reference was made to following judgements that there is no scope of treating unexplained cash credit when there is repayment of loan in subsequent years 1 The Hon'ble Gujarat High Court in CIT Vs Apex Therm Packaging Private Limited 222 Taxman 125 2 The Hon'ble Calcutta High Court in PCIT 9 Vs. M/s Sreeleathers 448 ITR 332 3. The Hon'ble Calcutta High Court in the case of PCIT Vs. Overtop Marketing (P.) Ltd [2023] 148 taxmann.com 94 (Calcutta) [03-01-2023] 4 The Hon'ble ITAT Kolkata in Poddar Realtors Vs ITO. (ITA 265/Kol/2023 dated 22.06.2023 5. The Hon'ble Gujarat High Court in the case of PCIT Vs. Ambe Tradecorp (P) Ltd [2022] 145 taxmann.com 27 (Gujarat) Conclusion Thus, based on the discussions above, I am of the view that the appellant company had discharged its burden to prove identity, creditworthiness and genuineness of the loan party by submitting detailed submissions including copy of MCA database. ledger copies, loan confirmation, copy of audited accounts, copy of extracts of bank statement to establish the identity and creditworthiness of loan creditors and genuineness of the transactions with the said loan party during the instant year. The loan has been repaid in the subsequent year. The loan creditors had substantial net-worth of its own. There is no finding in the assessment order which could doubt the genuineness of the transactions. Thus, the conclusion drawn by the Assessing Officer that the loan transaction represents unexplained cash credit cannot be sustained and the additions made amounting to Rs. 5,49,40,000/- is directed to be deleted. Thus, this Ground 2 is treated as ALLOWED.”

6 ITA Nos. 2921 & 2922/Kol/2025 Dailmer Industries Private Limited 7. The DR submitted that the additions made by the ld AO were wrongly deleted by the ld CIT(A) by misconstruing the facts that these were DR submitted that the notices issued u/s 133(6) of the Act were not replied and therefore the transactions could not be verified. The ld DR therefore prayed that the order of AO may be restored.

7 ITA Nos. 2921 & 2922/Kol/2025 Dailmer Industries Private Limited 19.02.2024 and Hon’ble Gujarat High Court in the case of Ambe Tradecorp (P.) Ltd., reported in [2022] 145 taxmann.com 27 (Gujarat).

8 ITA Nos. 2921 & 2922/Kol/2025 Dailmer Industries Private Limited reported in [2022] 145 taxmann.com 27 (Gujarat), wherein it has been held as under :-

"3. The issue in this case arose in respect of the assessment year 2012- 2013. It appears that the two loan transactions of Rs. 8,50,00,000/- and Rs. 23,70,00,000/- received by respondent assessee from one M/s. J.A Infracon Private Limited and M/s. Satya Retail Private Limited were treated by assessing officer to be sham in the sense that the creditworthiness etc. of the giver of the loan were not established. Accordingly, the assessing officer made addition under section 68 of the Act. 3.1 While the assessing officer dealt with unexplained cash credit from the M/s. Satya Retail Private Limited and from M/s. J.A Infracon Private Lim- ited in his order in paras 5.1 and 5.2 respectively, the Commissioner of Income-tax in the appeal preferred by assessee found on facts and the material before it that the said two cash creditors had been holding there identity, creditworthiness and genuineness in respect of the loan transac- tions. 3.2 The appellate authority observed that, "In this regard, it has been noticed that ledger accounts and confirmations of the aforesaid two parties have been provided by the appellant to the AO in the assessment pro- ceedings. Thereafter, the AO also carried out the independent inquir- ies u/s. 133(6) of the I.T. Act and in compliance thereto both the compa- nies have submitted the requisite information." 3.3 The information supplied by assessee was duly noticed by appellate authority and facts in that regard were recorded also to arrive at a finding that the unsecured loans to the aforesaid parties have been paid by ac- count payee cheques from the bank account of the assessee which was not in dispute, muchless in doubt. The accounts were finally settled with the repayment of the loan to the lender companies. 3.4 When the revenue preferred appeal before the Appellate Tribunal, the Tribunal confirmed the findings recorded by the Appellate Authority. The Tribunal referred to the decision of Durga Prasad More (82) ITR 540 and also in Sumati Dayal (214) ITR 801, to further record on the basis of the facts that the assessee had furnished the details such as copy of ledger account, bank statements, income tax returns, balance sheet etc. It was also recorded that notice under Section 133(6) of the Act was issued to the said parties which were duly responded by them. The identity of the parties could not be, therefore disputed, recorded the tribunal. The aspect was also noticed that the assessee was not beneficiary of the loan received by it and the loan was repaid by the assessee in the subsequent year. It led to unacceptable conclusion that the impugned transaction was a busi- ness transaction between the assessee and the loan parties and that they could not be doubted for their genuineness. 3.5 While the revenue has tried to put up a case that the transactions were in the nature of accommodation entries, this case has only

9 ITA Nos. 2921 & 2922/Kol/2025 Dailmer Industries Private Limited presumptive and assumptive value not supported by any factual data. On the contrary, on the basis of the material before the authorities, the trans- actions were found to be genuine. 4. Learned advocate for the appellant attempted to emphasize that for the purpose of application of Section 68 of the Act, three ingredients were necessary. Firstly identity of the parties to the transaction of loan, second is the creditworthiness of such parties and thirdly the genuineness of the transaction. It was submitted in vain that neither of the ingredients were satisfied. 5. As discussed above, since the requisite material was furnished by as- sessee showing the identity and since the assessee was not beneficiary when the loan was repaid in the subsequent year, even the ingredients of creditworthiness and genuineness of transaction were well satisfied. 6. The Tribunal rightly recorded in para 29 of the judgment, "Once repayment of the loan has been established based on the documen- tary evidence, the credit entries cannot be looked into isolation after ig- noring the debit entries despite the debit entries were carried out in the later years. Thus, in the given facts and circumstances, were hold that there is no infirmity in the order of the Ld.CIT-A. " 7. For the reasons recorded above, no question of law muchless substan- tial questions arises in this appeal. It stands meritless and accordingly dismissed. 10. This case is covered by the assessee’s own case in ITA No. 276/Kol/2025, AY 2021-22. The relevant portion of the said order is extracted below:

“8. We have heard the rival submissions and perused the materials available on record, we note that the search u/s 132(1) as well as survey u/s 133A of the Act were conducted on Goel Group of cases on 15.03.2022. The assessee was also part of the said group. During the search, according to the ld. AO various incriminating documents were discovered and seized which revealed that assessee had borrowed two money by way of loans, aggregating to ₹11,50,00,000/- from two parties namely; i) ₹6,50,00,000 from Indian Infotech & software Ltd. and ii) ₹5,00,00,000/- from Manish Co. Pvt. Ltd. The assessee filed complete evidences qua the lender companies before the ld. AO, however, the ld. AO by relying on the statement of Shri Jivendra Mishra, dated 28.09.2014, added these loans as unexplained cash credit to the income of the assessee in the assessment farmed u/s 143(3) dated 08.03.2023. Besides the ld. AO also disallowed the interest paid on these loans of ₹1,10,18,307/- and commission paid for arranging such bogus loans amounting to ₹5,75,000/-. The ld. AO noted that in case of Indian Infotech and Software Ltd. notice u/s 133(6) of the Act was served through speed post however, no response was received whereas in case of another lender Shri Manish Co. Pvt. ltd. the notice u/s 133(6) of the Act could not be served. In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee by passing very reasoned and speaking order. We note that the ld. CIT

10 ITA Nos. 2921 & 2922/Kol/2025 Dailmer Industries Private Limited (A) has clearly recorded a finding of fact that Shri Navin Kumar Saffar was chief account head of Goel Group and his statement was recorded on 15.03.2022 and he conformed the loan transactions to be actual transactions. It was also noted by the ld. CIT (A) that the documents seized contained the list of loan transactions of Laser Power and Infra Pvt. Ltd and not the assessee company. Therefore, no adverse inference could be drawn from the statement of Shri Navin Kumar Saffar. Similarly, the ld. CIT (A) noted that the ld. AO referred to the statements of Arun Nangalia recorded on 15.03.2022, Anuj Bukrediwala dated 16.05.2016, Jivendra Mishra dated 28.09.2014, Raj Kumar Kothari dated 02.03.2016, Subhash Kumar Banka dated 16.03.2022, and Deepak Goel 10.05.2022 and the ld. AO relied on the statement of Arun Nagalia wherein he alleged that the assessee had received an accommodation entry from M/s Vikas Developers & Promoters Pvt. Ltd., whereas we note that the said parties are not the lenders in the assessee company and therefore, the statement of Shri Arun Nagalia is irrelevant so far as the assessee’s case is concerned. So far as the statement of Anuj Bukrediwala dated 16.05.2016, is concerned, the ld. CIT (A) noted that the statement was recoded six years before the date of the search on the Goel Group and the parties mentioned in the statement of the said person namely Rareview Commercial Pvt. Ltd and Rudramala Vyapaar Pvt. ltd. were not the lender parties, who lent money to the assessee. Similarly, the statement of Jivendra Mishra dated 28.09.2014, which mentioned Badal comotrade Pvt. ltd. and Contship Commodities Pvt. ltd. being shell companies but the fact of the matter is that these were not the loan parties who lent money to the assessee. Therefore, the statement of Shri Jivendra Mishra is not relevant. Similarly, the ld. AO refrered to the statement of Raj Kumar Kothari dated 02.03.2016, who referred two companies namely Zigma Electricals Pvt. ltd. and Nyctea Trading Pvt. Ltd. to be shell companies but again these were not loan parties and therefore, the statement is not relevant so far as the assessee is concerned. Therefore, we so far as these observations of the ld. CIT (A) are concerned, we are in full agreement that all the statements are not relevant at all to the assessee’s case. 9. We also note that that the assessee has provided interest on loan of ₹15,55,892/- taken from Indian Infotech and software Ltd. and TDS of ₹1,16,694/- was deducted. We also note that the loan was repaid during the F.Y. 2022-23. The said lender was non-banking finance company registered with RBI and is engaged in the business of financing, investment and training on computer technology and its related activities. We note that the said company has aggregate unsecured loans of ₹186.28 crores given to various parties out of its own funds of ₹241.60 crores. The assessee has filed all the documents like MCA database, copy of ITR Acknowledgment, audited accounts, ledger copies, and copies of extracts bank statements to establish the identity and creditworthiness of the aforesaid loan party and genuineness of the transactions. The ld. CIT (A) even noted that the party has replied to the notice u/s 13(6) of the Act whereas the ld. AO in the assessment order has stated that the party has not replied to the notice issued by the ld. AO. Similarly, in the case of Manish Co. Pvt. Ltd. interest of ₹24,42,740/- was provided and TDS of ₹1,83,207/- was deducted at source. The said loan was repaid in 2022-23. So far as the creditworthiness is concerned the said company has net worth of ₹33 crores and profit before tax of ₹58.89 lacs. The company has submitted before the authorities below copy of MCA Database, copy of ITR Acknowledgment, audited accounts, ledger copies, and copies of extracts bank statements to establish the identity and creditworthiness of the aforesaid loan party and genuineness of the transactions. 10. In our opinion, once the loans were repaid then the provisions of Section 68 of the Act cannot be invoked in respect of the loan transactions as has been held in

11 ITA Nos. 2921 & 2922/Kol/2025 Dailmer Industries Private Limited the case of PCIT vs. Ambe Tradecorp (P.) Ltd. (2022) 145 taxmann.com 27 (Gujarat), in which the Hon'ble High Court has held that once the repayment of loan has been established based on the documentary evidences then the credit entries cannot be looked in isolation after ignoring the debit entries despite the fact that debit entries were carried out in the later years. Even the case of the assessee is squarely covered by the decision of the co-ordinate bench decision in the case of Poddar Realtors Vs. ITO in ITA No. 265/Kol/2023, vide order dated 22.06.2023. Both the decisions have been followed by the ld. CIT (A) while deleting the addition. Under these circumstances, we do not find any infirmity or defect in the order of the ld. CIT (A) which warrant our interreference. Accordingly, we uphold the appellate order by dismissing the appeal of the Revenue. 11. In the result, the appeal of the Revenue is dismissed.” 11. Therefore in view of the facts above and respectfully following the ratio laid down in the various decisions including the decision of the coordinate bench in assessee’s own case , we up hold the order of ld CIT(A) on this

ITA No. 2922/Kol/2025

Order pronounced on 06.03.2026

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) Judicial Member Accountant Member Dated: 06.03.2026

12 ITA Nos. 2921 & 2922/Kol/2025 Dailmer Industries Private Limited AK, Sr. PS Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR)

//True copy// By order

Assistant Registrar, Kolkata Benches