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DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(3), KOLKATA, KOLKATA vs ADHUNIK INFRASTRUCTURES PRIVATE LIMITED , KOLKATA | BharatTax

DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(3), KOLKATA, KOLKATA vs. ADHUNIK INFRASTRUCTURES PRIVATE LIMITED , KOLKATA

ITA 1069/KOL/2024Status: DisposedITAT Kolkata09 February 2026AY 2015-16Bench: SHRI SONJOY SARMA (Judicial Member), SHRI RAKESH MISHRA (Accountant Member)13 pages

AI SummaryAllowed

Facts

The Revenue filed an appeal against the order of the CIT(A) who deleted additions of Rs. 55,00,000 made under Section 68 and Rs. 55,000 under Section 69A. The additions were for alleged bogus unsecured loans from M/s. Ambala Trafin Pvt. Ltd. and M/s. Desire Mercantile Private Ltd.

Held

The Tribunal held that the assessee had discharged its primary onus by providing details of the lenders, their creditworthiness, and the genuineness of the transactions. The loans were also repaid within the same financial year, and the Assessing Officer failed to provide specific reasons to reject the explanation.

Key Issues

Whether the additions made by the AO on account of alleged bogus unsecured loans and undisclosed income are justified when the assessee has provided evidence of identity, creditworthiness, and genuineness of transactions, and the loans have been repaid.

Sections Cited

68, 69A, 250, 143(3), 148, 131(1), 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA

Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA

For Respondent: DR. Assessee represented by : Miraj D. Shah, AR

order

: 09-February-2026 ORDER

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

1.

This appeal filed by the Revenue is against the order of the Commissioner of Income Tax (Appeals)- 21, Kolkata [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2015-16 dated 26.03.2024.

2.

The Revenue is in appeal before the Tribunal raising the following grounds of appeal:

1. The Ld. CIT(A) has erred in facts and in law by allowing the appeal of the assessee by deleting the additions of Rs. 55,00,000/- u/s. 68 of the Act on account of bogus unsecured loans treated as unexplained cash credit made by the AO since the assessee had failed to establish the genuineness of the transactions and the identity and creditworthiness of the creditors.

2. The Ld. CIT(A) has erred in facts and in law by allowing the appeal of the assessee by deleting the additions of Rs. 55,000/- u/s. 69A of the Act on account of undisclosed income made by the AO since the assessee had failed to establish the genuineness of the transactions and the identity and creditworthiness of the creditors. ITA No.: 1069/KOL/2024 Assessment Year: 2015-16 Adhunik Infrastructures Private Limited.

3. The department craves the right to add, alter, amend or withdraw any ground of appeal before or at the time of hearing.”

3. Initially the appeal was dismissed on account of low tax effect. The Revenue subsequently filed a Miscellaneous Application stating that the case, even though having low tax effect, was falling under the exceptional clause (h) of para no. 3.1 of CBDT circular No.5/2024 dated 15.03.2024 and accordingly, the order dismissing the appeal on account of low tax effect was recalled and the appeal was heard on the same day.

4. Brief facts of the case are that the assessee had filed its return of income on 30.09.2015 showing total income of ₹7,14,09,910/- and the assessment was made u/s 143(3) of the Act on the total income of ₹8,27,89,050/- vide order dated 30.12.2016. Further, order giving effect to the appeal order was passed on 03.05.2017 and the total income was determined at ₹7,14,14,900/-. Subsequently, information was received on the insight portal and on the basis of the information, the assessment was reopened vide issue of notice u/s 148 of the Act as the assessee was found to have obtained bogus unsecured loan from M/s. Ambala Trafin Pvt. Ltd. for ₹25 Lakh and in FY 2014-15 and the income to this extent had escaped assessment. M/s. Ambala Trafin Pvt. Ltd. had raised shares capital/premium to the tune of ₹60,38,50,000/- on 31.03.2012 through 23 allottee companies by issuing shares, each at a premium of ₹999/- per share. The loan of ₹25 Lakh was treated as unexplained along with another sum of ₹30 Lakh from M/s. Desire Mercantile Private Ltd, the details of which were available on the database of the Department and the addition of ₹55 Lakh was made. Before the Ld. CIT(A), the assessee filed the details of the loan taken from M/s. Ambala Trafin Pvt. Ltd. and also informed that the investor ITA No.: 1069/KOL/2024 Assessment Year: 2015-16 Adhunik Infrastructures Private Limited. company had made compliance to the summons issued u/s 131(1) of the Act vide reply dated 22.02.2022 and the copy of email dated 27/02/2022 sent in response to the summons u/s 131 of the Act was also filed. The creditor had furnished the source of loan and had also submitted copy of ITR-V for AY 2015-16, ledger, confirmation and bank statement reflecting transaction of the loan creditor and it was stated that the assessee had discharged the primary onus of establishing the identity and creditworthiness of the loan creditor. It was submitted before the Ld. CIT(A) that the loan was taken in FY 2014-15 and the same had been repaid in that year and after that the company had never entered into any transaction with M/s. Ambala Trafin Pvt. Ltd. after repayment of loan with applicable interest and was not in contact with the said company. As regards the loan taken from M/s. Desire Merchandies Pvt. Ltd., it was stated that the assessee was having only 5 days’ time to explain and furnish the document in respect of the transaction of ₹30 Lakh and though the same was not part of the reasons recorded for reopening the case, the assessee complied with the requirement and furnished the documents being ledger of M/s. Desire Merchandies Pvt. Ltd. since inception till repayment, the bank statement of M/s. Desire Merchandies Pvt. Ltd. highlighting the amount of loan given to the assessee, the loan confirmation of accounts of FY 2014-15 and the PAN. It was stated that Ld. AO had been requested to issue summons u/s 131/notice 133(6) of the Act to verify the said transaction and till such exercise was done, it was requested not to take any adverse view. However, without pointing out any defects in the documents furnished by the assessee, the Ld. AO made the addition. It was submitted that even this loan had been repaid and evidences in respect of the same were submitted before the Ld. AO and reliance was ITA No.: 1069/KOL/2024 Assessment Year: 2015-16 Adhunik Infrastructures Private Limited. placed upon the decision of Hon'ble Calcutta High Court in the case of Principal Commissioner of Income Tax-9, Kolkata v/s M/s. Sreeleathers in ITAT/18/2022 wherein it has been held as under: “Therefore, the assessing officer ignored the basic tenets of law before invoking his power under Section 68 of the Act. Fortunately, for the assessee, CIT(A) has done an elaborate factual exercise, took into consideration, the creditworthiness of the 13 companies the details of which were furnished by the assessee. More importantly, the CIT noted that all these companies responded to the notices issued under Section 133 (6) of the Act which fact has not been denied by the assessing officer. On going through the records and the net worth of the lender companies, the CIT has recorded the factual findings that the net worth of those companies is in crores of rupees and they have declared income to the tune of Rs. 45,00,000/- and 75,00,000/-. Therefore, the assessing officer if in his opinion found the explanation offered by the assessee to be not satisfactory, he should have recorded so with reasons. We find that there is no discussion on the explanation offered ITAT 18 OF 2022 by the assessee qua, one of the lenders. Admittedly, the assessee was not issued any show cause notice in respect of other lenders. However, they are able to produce the details before the CIT(A) who had in our view rightly appreciated the facts and circumstances of the case. As pointed out earlier, the assessing officer brushed aside the explanation offered by the assessee by stating that merely filing PAN details, balance sheet does not absolve the assessee from his responsibilities of proving the nature of transactions. It is not enough for the assessing officer to say so but he should record reasons in writing as to why the documents which were filed by the assessee along with the reply dated 22.12.2017 does not go to establish the identity of the lender or prove the genuineness of the transaction or establish the creditworthiness of the lender. In the absence of any such finding, we have to hold that the order passed by the assessing officer was utterly perverse and rightly interfered by the CIT(A). The Tribunal re-appreciated the factual position and agreed with the CIT(A). The tribunal apart from taking into consideration, the legal effect of the statement of Ashish Kumar Agarwal also took note of the fact that the notices which were issued by the assessing officer under Section 133 (6) of the Act to the lenders where duly acknowledged and all the lenders confirmed the loan transactions by filing the documents which were placed before the tribunal in the form of a paper book. These materials were available on the file of the assessing officer and there is no discussion on this aspect. Thus, we find that the tribunal rightly dismissed the appeal filed by the revenue.” ITA No.: 1069/KOL/2024 Assessment Year: 2015-16 Adhunik Infrastructures Private Limited.

5. Reliance was also placed upon the decision of Hon'ble Gujarat High Court in the case of Principal Commissioner of Income-tax vs. Ambe Tradecorp (P.) Ltd. [2022] 145 taxmann.com 27 (Gujarat) dated 05.07.2022 wherein it has been held that the assessee was not the beneficiary as the loan was repaid by the assessee in the subsequent year and therefore, the addition made u/s 68 of the Act on account of said loan was unjustified. The Ld. CIT(A) gave his finding as under: “Grounds 7 & 8 These grounds agitate against the action of the AO in making addition of Rs.25,00,000/-received from M/s Ambala Trafin Pvt Ltd & Rs.30,00,000/- received from M/s Desire Merchandise Pvt Ltd as unexplained cash credit u/s 68 of the Income Tax Act, 1961 on merits. The facts of the case are that during the relevant F.Y: 2014-15, the appellant had taken unsecured loans to the tune of Rs.25,00,000/- from M/s Ambala Trafin Pvt Ltd & to the tune of Rs.30,00,000/- from M/s Desire Merchandise Pvt Ltd. On perusal of the assessment order, it is observed that the AO has stated that a search and seizure action was conducted upon M/s Ambala Trafin Pvt Ltd on 03.01.2019. During the course of such search, statement of Shri Dharma Nath Thakur, one of the directors of M/s Ambala Trafin Pvt Ltd was recorded, wherein he has deposed that he was a dummy director and affairs were controlled by Bajrang Lal Agarwal & Pawan Kothari. The statement of Bajrang Lal Agarwal was also recorded on 10.01.2019 wherein Bajrang Lal Agarwal had stated that the Ambala Trafin Pvt. Ltd was incorporated to provide bogus unsecured loans to various beneficiaries on interest. No such discussion has been made by the AO in respect of the other lender M/s Desire Merchandise Pvt Ltd apart from the fact that information was received regarding the same on “Insight Portal” of the Department and that the name of the said company was reflected in the departmental list of shell companies. The appellant on the other hand has stated that he had submitted the relevant documentary evidences before the AO to establish the identity, creditworthiness of the lenders and the genuineness of the transaction. The appellant submitted the following documents: