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Facts
The Revenue appealed against the CIT(A)'s deletion of additions related to bogus unsecured loans and share purchase for AY 2018-19. The CIT(A) found that the unsecured loans belonged to M/s Kishlay Snacks Products and the share transactions pertained to AY 2017-18.
Held
The Tribunal upheld the CIT(A)'s decision. For unsecured loans, it noted the AO's failure to conduct proper inquiries and the clear attribution to M/s Kishlay Snacks Products. For share transactions, it agreed that the transactions related to AY 2017-18 and not the impugned AY 2018-19.
Key Issues
Justification of CIT(A)'s deletion of additions for bogus unsecured loans and share purchases for the impugned assessment year.
Sections Cited
69A, 68
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Income Tax Appellate Tribunal, GUWAHATI BENCH, GUWAHATI
Before: SHRI GEORGE MATHAN, JM & SHRI LAXMI PRASAD SAHU, AM
This is an appeal filed by the Revenue against the order of the Commissioner of Income-tax (Appeals), Central, North-East Region, Guwahati (hereinafter referred to as the “Ld. CIT(A)”] in appeal no. CIT (A), Central NER, Guwahati/100060/2017-18 dated 07.06.2023 for the AY 2018-19.
Shri Rohit Kappor & Virsain Aggarwal, represented on behalf of the assessee and Shri Santosh Kumar Karnani, Sr. DR represented on behalf of the Revenue.
The Revenue has raised following grounds of appeal:-
5. The first issue in regard to an addition of ₹98,96,517/- deleted by the ld. CIT (A) representing bogus unsecured loans.
5.1. It was a submission that no detail has been produced by the assessee before the ld. AO and the ld. CIT (A) has considered fresh evidence. It was a submission that the ld. CIT (A) came to a conclusion that the amounts related to the firm M/s Kishlay Snacks Products and not the assessee. It was a submission that in the course of search on the assessee and assessee has admitted that the money belongs to him. It was a submission that the addition as made by the AO and as deleted by the ld. CIT (A) may be reversed and the order of the AO restored on this issue.
5.2. In reply, the Learned AR drew our attention to page 67 and 68 and 69 of the ld. CIT (A), wherein in paragraph 3 to 5 the ld. CIT (A) has held as follows:-
“3. That, no enquiry seems to have been conducted by the Investigation wing (i.e. during the course of post search investigation) or by the AO (i.e. during the course of the assessment proceedings) with any of the party whose name was appearing in the aforesaid incriminating material as to the genuineness of the unsecured loans availed by 5.4. We have considered the rival contentions . A perusal of the facts of the present case clearly shows that in paragraph 9 at pages 68 and 69, towards the end of the paragraph, the Learned CIT (A), after considering the facts, has categorically recorded that ‘even though the assessing officer has arrived at a correct conclusion, but he has failed to take the correct action on this correct conclusion, having held that the unsecured loans availed by M/s Kishlay Snacks Products were from bogus Jama Karchi parties, it was incumbent on the AO to have made the corresponding addition in this regard, in the hands of the person M/s Kishlay Snacks Products, who had availed these bogus unsecured loans’. Here, we would draw attention to the fact that the order of the ld. CIT (A) dated 7th June, 2023, the impugned assessment year i.e.
The second issue raised in the appeal is against the action of the Learned CIT (A) in deleting the addition of ₹1,86,50,000 made on account of purchase of shares for the A.Y. 2018-19.
6.1. It was a submission that the Learned CIT (A) has deleted the addition without considering the facts in its correct perspective. The Learned Senior D.R. drew our attention to pages 80, 81 and 82 of the Order of the Learned CIT (A) to submit that the assessee in the course of the search had admitted to disclose partial transactions in so far as the assessee admitted that the transactions were with shell companies. It was a submission that even after these findings, the Learned CIT (A) has deleted the addition. It was a prayer that the Order of the Learned CIT (A) may be reversed and that of the AO restored. The Learned DR also drew our attention to pages 3 and 4 of the assessment order to submit that the AO has specifically brought out that these are Jama Karchi transactions and that the assessee had admitted to surrender of the amounts.
6.3. We have considered the rival contentions . A perusal of the Order of the Learned CIT (A) shows that the Learned CIT (A) has extracted details from the assessment order and has come to the conclusion that these shares were allotted by the company M/s Kishlay Foods Private Limited on 31st March, 2014. These shares were purchased on 1st February, 2017 and thereafter, had been sold on 15th March, 2017. Thus, clearly the transaction relates to the A.Y. 2017-18. The impugned A.Y. 2018-19. The revenue has not been able to point out how these transactions which relate to the A.Y. 2017-18, could be assessed in the impugned assessment year being 2018-19. As the revenue has not been able to dislodge these primary findings of facts by the ld. CIT (A), we find no error in the order of the Learned CIT (A), which calls interference on this issue. Consequently, the findings of the Learned CIT (A) on this issue stands upheld.
In the result, appeal of the revenue stands dismissed.
Order pronounced in the open court on 09.02.2026.