DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 4(2), KOLKATA, AAYAKAR BHAWAN POORVA vs. RAJABHAT TEA COMPANY LIMITED, KOLKATA
In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal upheld the CIT(A)'s decision, finding that the assessee had discharged its onus by providing sufficient evidence for the unsecured loans and interest payments. The additions made by the AO were therefore deleted.
What were the facts?
The Revenue appealed against the deletion of additions made by the AO for unsecured loans and interest thereon. The assessee had provided details of loan creditors, bank statements, and confirmations, and had repaid the loans with interest.
What were the issues?
Whether the additions made by the AO on account of unexplained cash credits (unsecured loans) and interest thereon were sustainable when the assessee had provided evidence of the loans and their repayment.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRI SONJOY SARMA, JM
Heard together (2 matters)
Read from the judgment's own cause title. This page is filed under one of them.
O R D E R Per Rajesh Kumar, AM:
In these appeals preferred by the Revenue and Cross Objection by the assessee against the orders of the Commissioner of Income-tax
At the outset, we note that there is delay of 83 days in filing the appeal by the Revenue for which the condonation petition has been moved by the Revenue dated 03.05.2024, wherein it has been stated that in order to file the appeal, the file has to go through various stages in the hierarchy for obtaining and approvals and hence, the delay of 83 days in filing the appeal. Considering the contents of the condonation and the arguments of the rival parties we are quite convinced about the sufficiency and genuineness of the reasons for delay and accordingly, condone the same by admitting the appeal for adjudication.
The only issue raised by the Revenue in the various grounds of appeal is against the deletion of addition of ₹1,50,00,000/- as made by the ld. AO u/s 68 of the Act, in respect of unsecured loan being unexplained cash credit and also against the deletion of ₹20,57,582/- by CIT (A) which was added by the ld. AO on account of interest on unsecured loan.
The facts in brief are that the assessee filed return of income on 14.10.2016, declaring nil income. A search action u/s 132 of the Income-tax Act, 1961 (the Act) was conducted 26.11.2015 and subsequent dates against the persons and business concerns of Jhunjhunwala Group. During the course of search and seizure operation several documents were inventoried and seized. On examination of these documents certain documents were found to be
In the appellate proceedings, the ld. CIT (A) allowed the appeal of the assessee after taking into consideration, the submissions and the contentions raised by the assessee. The ld. AR. Noted that assessee has raised ₹1,50,00,000/- from two parties, namely; Saffron Devcon Pvt. Ltd. of ₹ 1,00,00,000/- and Unity Prodev Ventures Pvt. Ltd. Rs. ₹50,00,000/ and assessee had paid interest ₹20,57,582 to four partis, namely; ₹4,50,000/- to Continental Fiscal Management Ltd., 4,50,000/ to Leisure Devecon Pvt. Ltd., ₹7,07,582/- to Saffron Devcon Pvt. Ltd. & ₹4,50,000/- to Unity Prodev Ventures Pvt. Ltd. The ld. CIT (A) also noted that the receipt of loan of ₹1.5 crore was evidenced by these seized documents. Therefore, held the proceedings u/s 153C of the Act, to be valid proceedings. Thereafter, the ld. CIT (A) after analyzing the facts of the assessee case and various decisions and case laws deleted the addition by holding and observing as under:-
“6.9. In light of the aforesaid judgements, as well as examining the assessee’s submission and considering the assessee’s contention, it is noticed that the appellant assessee has discharged its onus by providing the details of the aforesaid two loan creditors, relevant ledgers, respective bank statements as well as confirmation letters from the creditors to verify the veracity of the loans taken. Despite the fact that the AO had enough time to examine the genuineness of the aforesaid loan creditors at length. He only relied on the recorded statements in the search and seizure operations. Additionally, it is also observed that, the assessee company has repaid all the aforesaid loans in the subsequent F.Y.s to all the loan creditors and even along with respective interest amounts. Moreover, the loan creditors have also declared their source of investment in the assessee company in their confirmation letters and the AO hasn’t brought any corroborative evidence on record which can prove the aforesaid loans as bogus and as assessee’s own money routed through the loan creditors in the form of
Revenue has challenged the deletion of addition of ₹1 crore by the ld. CIT (A) as well as deletion of ₹3,19,726/- on count of interest on unsecured loans.
We have already decided the similar issue in for A.Y. 2016-17.For A.Y. 2015-16. The assessee company had raised unsecured loans of ₹1 crore from two parties namely namely ₹50,00,000/- from Continental Fiscal Management Ltd. and ₹ 50,00,000/- from Leisure Devcon (P) Ltd. and paid interest of ₹
CO No. 30/KOL/2024 for A.Y. 2015-16
Coming to CO No. 30/KOL/2024 arising in A.Y. 2015-16, since, we have confirmed the order of ld. CIT (A) in the CO filed in for A.Y. 2015-16, challenging the assessment of jurisdiction u/s 153C of the Act, is dismissed as not pressed.
In the result, the appeals of the Revenue as well as CO of the Assessee are dismissed.
Order pronounced in the open court on 17.12.2024.
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