RAJENDRA KUMAR KAPOOR,KOLKATA vs. D.C.I.T., CIRCLE - 29,, KOLKATA

ITA 2060/KOL/2025Status: DisposedITAT Kolkata26 February 2026AY 2018-20195 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of ₹50,00,000 made under Section 68 of the Income-tax Act, 1961, was not justified and set aside the order of the NFAC. The Tribunal noted that the assessee had provided loan confirmation, PAN details, address, and the lender's audited balance sheet to the AO. Furthermore, the loan was repaid in subsequent financial years through banking channels. The Tribunal found that once the assessee furnished all the requisite evidence regarding the loan transaction and its repayment, and the AO failed to point out any specific infirmity in these documents, no addition under Section 68 was warranted. The Tribunal relied on a series of decisions from the Jurisdictional High Court (Kolkata) and the Gujarat High Court, specifically citing PCIT-2, Kolkata Vs. Rahul Premier India Agency Private Limited and others, and Ambe Tradecorp (P) Ltd. Vs. PCIT, which held that if an assessee provides all evidence regarding loan creditors and the loans are repaid, such amounts cannot be added to income under Section 68. The ratio decidendi is that the burden of proof under Section 68 is discharged by the assessee by providing identity, capacity, and genuineness of the creditor, and if the loan is repaid, it further substantiates the transaction.

What were the facts?

The assessee, Rajendra Kumar Kapoor, filed an appeal against the order of the National Faceless Appeal Centre, Delhi (NFAC), dated August 20, 2025, for Assessment Year 2018-19. The appeal challenged the confirmation of an addition of ₹50,00,000 by the NFAC, which was originally made by the Assessing Officer (AO) under Section 68 of the Income-tax Act, 1961. This addition pertained to a loan taken by the assessee from M/s Madhudhan Barter Pvt. Ltd. The AO reopened the case under Section 147 after receiving information that the assessee had received credit from an 'entry operator' through his companies. The assessee submitted loan confirmation, audited balance sheet, and bank statements, stating the loan was taken at 9% interest and repaid after TDS. The AO made the addition, considering the lender a shell company and the loan unexplained. The NFAC confirmed this addition.

What were the issues?

1. Whether the addition of ₹50,00,000 as unexplained cash credit under Section 68 of the Income-tax Act, 1961, is justified when the assessee has provided loan confirmation, PAN details, address, audited balance sheet, and repaid the loan through banking channels. Assessee's Contention: The assessee argued that all necessary documents, including loan confirmation, lender's audited balance sheet, and bank statements, were provided to the AO. The loan was taken from M/s Madhudhan Barter Pvt. Ltd. at 9% interest and duly repaid through banking channels after deducting tax at source. Reliance was placed on various High Court and ITAT decisions, including PCIT-2, Kolkata Vs. Rahul Premier India Agency Private Limited, PCIT Vs. M/s Narayan Tradecom Pvt. Itd., PCIT Vs. Alom Extrusions Ltd., PCIT Vs. M/s Edmond Finvest Pvt. Itd., PCIT Vs. Parwati Lakh Udyong, Ambe Tradecorp (P) Ltd. Vs. PCIT, ACIT Vs H.K. Pujara Builders, and DCIT Vs. Rohini Builders, which held that if loan creditors' evidence is provided and loans are repaid, no addition under Section 68 is warranted. Revenue's Contention: The revenue, through the AO and DR, contended that the loan was received from a shell company and remained unexplained. The NFAC confirmed the addition, stating that the provided documents alone could not prove the genuineness of the loan transactions.

Which sections of the Income-tax Act were involved?

Section 68,Section 139(5),Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, KOLKATA

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

For Appellant: Shri Anil Kochar, AR
For Respondent: Shri S.B. Chakraborthy, DR
Hearing: 20.01.2026Pronounced: 26.02.2026

Per Rajesh Kumar, AM:

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 20.08.2025 for the AY 2018-19. 2. The only issue raised in the various grounds of appeal is against the confirmation of addition of %50,00,000/- by the Id. CIT (A) as made by the Id. AO u/s 68 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) in respect of loan taken from M/s Madhudhan Barter Pvt. Ltd.

3.

The facts in brief are that the assessee filed the revised return of income u/s 139(5) of the Act on 07.02.2019, declaring total income

at 2%2,50,

The order continues below.

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