VALUE PLUS RETAIL PRIVATE LIMITED,NOIDA vs. DCIT, CIRCLE 3(1),, KOLKATA

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ITA 1984/KOL/2025Status: DisposedITAT Kolkata13 January 2026AY 2012-20134 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the assessee had provided sufficient evidence regarding the unsecured loans from related parties who had genuine sources and creditworthiness. The Tribunal noted that the loans were repaid and the lenders had income from salaries. Consequently, the Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition.

What were the facts?

The assessee borrowed ₹3,95,80,391/- from 20 related parties as unsecured loans. Despite the assessee submitting ITRs, bank statements, and confirmations to prove the authenticity and creditworthiness of the lenders, the Assessing Officer (AO) treated the loans as unexplained cash credits and added them to the assessee's income. The CIT(A) confirmed this addition.

What were the issues?

Whether unsecured loans from related parties are unexplained cash credits. Whether interest on such loans is disallowable. Whether disallowance under Section 40A(ia) for late TDS deposit is valid.

Which sections of the Income-tax Act were involved?

Section 68,Section 40A(ia),Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH, KOLKATA

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

For Appellant: Shri Miraj D. Shah, AR
For Respondent: Shri S.B. Chakraborthy, DR

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 03.07.2025 for the AY 2013-14.

2.

The issue raised by the assessee in ground no.1 is general in nature.

3.

The issue raised by the assessee in ground nos.2 & 3 is against the order of ld. CIT (A) confirming the addition of ₹3,95,80,391/- by the ld. CIT (A) as made by the AO u/s 68 of the Act on account of unsecured loans.

3.2. In the appellate proceedings, the ld. CIT (A) confirmed the order of the ld. AO by simply confirming the finding of the ld. AO.

3.3. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has raised unsecured loans from related parties/ family members, who were having their sources and creditworthiness to lend. The assessee filed before the ld. AO as well as before the ld. CIT (A) the copies of ITRs, confirmations and their bank statements etc. However, the amounts were treated as unexplained cash credit and added to the income of the assessee by the AO. We also find that the loans were repaid in the subsequent financial years. We note that all the loans having their sources of income by way of salaries which had been noted by the authorities below while analyzing the data. Therefore, we are not in agreement with the conclusion drawn on this issue by the ld. CIT (A). The case of

4.

The issue raised in ground no.4, is against the disallowance of interest on the said unsecured loans, which is consequential to ground nos. 2 and 3. Since, we have already allowed the issue in ground nos.2 and 3, the ground no.4 is also allowed.

5.

The issue raised in ground no.5 is against the sustaining disallowance u/s 40A(ia) of the Act to the tune of ₹12,92,888/- on account of non- deposit of TDS, despite the fact that the assessee has deposited TDS before the due date of filing the return u/s 139(1) of the Act. We note that the ld. CIT (A) has already restored the issue to the file of the ld. AO for re-verification and adjudication afresh. Accordingly, we restore this issue to the file of the ld. AO and direct the ld. AO to decide the same in the light of the evidences filed by the assessee. The ground no. 4 is allowed for statistical purposes.

Order pronounced in the open court on 13.01.2026.

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