RAKESH DAGA,KOLKATA vs. ASSISSTANT COMMISSIONER OF INCOME TAX, CIRCLE - 37, KOLKATA, GOVT. PLACE (WEST)

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ITA 366/KOL/2024Status: DisposedITAT Kolkata02 December 2024AY 2015-16Bench: SHRI RAJESH KUMAR (Accountant Member), SHRI PRADIP KUMAR CHOUBEY (Judicial Member)10 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had discharged its initial burden by providing all necessary evidence regarding the identity, creditworthiness, and genuineness of the loan transaction. The AO failed to conduct further verification, and thus the addition was unjustified.

What were the facts?

The assessee received an unsecured loan of ₹21,17,068/- which was added to its income by the AO on the basis of information that the lender was an accommodation entry provider. The assessee provided details of the lender, including PAN, address, bank confirmation, and proof of repayment, but the AO made the addition based on an entry operator's statement.

What were the issues?

Whether the addition made under Section 68 for an unsecured loan is justified when the assessee has provided sufficient evidence of the lender's identity, creditworthiness, and genuineness of the transaction, and the AO has not conducted further inquiry.

Which sections of the Income-tax Act were involved?

Section 68

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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

For Appellant: Shri Soumitra Choudhury &, Shri Joydeep Chakraborty, ARs
For Respondent: Shri Pradip Kumar Biswas, DR
Hearing: 25.11.2024Pronounced: 02.12.2024

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 27.12.2023 for the AY 2015-16.

2.

The only issue pressed at the time of hearing against the order of ld. CIT (A) confirming the addition of ₹21,17,068/- as made by the ld. AO in respect of unsecured loan u/s 68 of the Act.

3.

The facts in brief are that the assessee filed its return of income on 30.09.2015 showing total income of ₹2,09,10,010/-, which was processed u/s 143(1) of the Act. Thereafter, the ld. AO received an information from investigation wing, Kolkata, that the assessee has

4.

In the appellate proceedings also the ld. CIT (A) dismissed the appeal of the assessee by simply affirming the order of the ld. Assessing Officer

5.

After perusing the order and materials available on record, we find that in this case the assessment was reopened after the ld. AO received information that the assessee has received accommodation entry from a company owned and operated by Mukesh Banka, the entry operator. We find that the assessee has filed all the evidences before the ld. AO comprising name, address, PAN no., bank statements confirmation, etc. although the notice were issued u/s 133(6) of the Act by the ld. AO to the lender was not complied with. Even, we note that the assessee is a big corporate having a turnover of ₹20,12,92,492/- and has shown net profit of ₹1,74,27,230/-.

“8. After hearing the rival contentions and perusing the relevant material placed before us, we find that the assessee has raised loans from twelve entities, the details of which were given in the assessment order in para 3. We note that the assessee has also paid interest on these loans after deduction of tax at source and the details were also given in the same table. The tax deducted at source was also deposited in the Government Treasury. We would like to note that these loans were repaid through banking channel even prior to passing of the assessment order by the ld. Assessing Officer. The assessee has filed copies of ITR acknowledgments, master-data of the lenders, audited financial statements, Memorandum & Article of Associations, copies of bank statements, loan confirmations and ledgers showing receipt and refund of loans alongwith TDS details in respect of each of the lenders, which are filed in the paper book from pages no. 11 to 718. We also note that the AO issued notices under section 133(6) of the Act to twelve parties which could only be served to six parties and remaining six cases, the notices were returned back unserved. We note that the six parties, to whom notices were served, have duly responded and replied with all the requisite details. The ld. Assessing Officer has made the addition on the basis of the statements of three persons, namely Shri Shri Abhishek Chokhani, Shri Sanjay Kumar Drolia and Shri Praveen Kumar Agarwal and stated that they have arranged the loans from four parties. The ld. Assessing Officer has disbelieved the transactions on the basis of the statements of three persons, who were stated to have arrangedloans four parties mentioned at serial nos. 1, 2 &6 and 11 and reached a generalized conclusion even on the remaining parties. The ld. CIT(Appeals) has simply dismissed the appeal of the assessee by passing a very cryptic and non-speaking order. Now the issue before us is whether the assessee has duly discharged his burden by filing the aforesaid evidences before the authorities or not. We note that the assessee has filed all the

7.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 02.12.2024.

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