DECPUTY COMMISSION OF INCOME TAX CENTRAL CIRCLE-3(1), KOLKATA, KOLKATA vs. CHIRAG JEWELLERS, KOLKATA

आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER:

2. Revenue has raised following grounds of appeal:-

1. Whether the Ld. CIT(A) has erred in facts and in law by allowing the appeal of the assessee by deleting the addition of Rs.2,00,00,000/- made by the AO under section 68 of the Act despite the assessee failing to produce any books of account

4. Aggrieved, assessee preferred the appeal before the ld. CIT (A) and placed following documents in order to explain the nature and source of the unsecured loans received from NCL Research and Financial Services Private Limited and also the genuineness of interest expenditure incurred towards interest payment made to Khoobsurat Ltd. & Jackson Investment Ltd. and NCL Research and Financial. services Ltd., which reads as under:-

“

Similarly the loans from M/s Khoobsurat Ltd, which were credited in assessee’s bank a/c with Standard Chartered Bank:

The loans received from M/s Jackson Ltd for Rs.2,50,00,000 & Rs.75,00,000 from Moonview Ltd were also credited in assessee’s bank a/c with Standard Chartered Bank:

It is evident that the loans were received through banking channels and therefore the genuineness of the transactions stand beyond doubt. The above loan along with outstanding interest was duly reflected in the audited balance sheet of the assessee for NCL Financial Research for Rs.2,00,00,000 & net interest Rs.5,59,727/- (6,21,918-62,192). In respect of interests for all loans, the assessee debited a sum of Rs.33,03,014/- in its audited accounts which included the disallowed interest of Rs.24,21,928. The net interest amount was paid to the respective lenders totaling Rs.21,79,727 vide cheque nos. 12389, 12390 & 12392, all dated 11/06/2014.

The above documents submitted before the AO as well as during the course of appellate proceedings and the AO has nowhere placed anything on record to disprove such transactions and therefore these facts also do not support the contention of the AO that the said loans were bogus. With regards to creditworthiness of the lenders, the following is observed from the audited accounts of M/s NCL Research &Financial Services Ltd :

Furthermore M/s NCL Research &Financial Services Ltd was also assessed for the AY: 2014-15 u/s 143(3) by ACIT-5, Kanpur. In his assessment order dated 30.11.2016, which is much after the dates on which the statements of Goutam Bose and Alok Kumar Das were recorded, the ACIT-5, Kanpur made no additions and the returned income of Rs.1,36,45,670/- was accepted by the AO. Considering the above mentioned own funds of the appellant as well as the substantial turnover of the appellant and the subsequent assessment being completed u/s 143(3) wherein the returned income has been accepted, the creditworthiness of the lender company cannot be placed in doubt especially owing to the fact that the AO has failed to bring anything on record which would dispute the financial credentials of M/s NCL Research &Financial Services Ltd. Similarly in respect of the other lenders the following is observed from the audited accounts as well as the ITR:

Both these lenders regularly file their returns of income and have also been subject to assessment between A.Y`s: 2010-11 to 2014-15 u/s 143(3) wherein assessment has been completed by the respective AO`s u/s 143(3). Therefore in these cases also the identity of the lenders cannot be disputed. In the assessment order for A.Y: 2014-15 in respect of M/s Khoobsurat Ltd which has been assessed by ACIT, CC- 1(1) Kolkata, vide assessment order dated 13.12.2015, only addition u/s 14A has been made. Similarly In the assessment order for A.Y: 2014-15 in respect of M/s Jackson Investments Ltd which has been assessed by ITO, Ward-6(2), Kolkata vide assessment order dated 29.12.2016, the income of the lender company has been assessed by the AO at Rs.31,30,270/-. So, these unsecured loans provided by these lender companies has been accepted by the respective AO`s in the assessment for A.Y: 2014-15. In this case, therefore, as per the replies of the appellant before the AO, the assessee as well as the lender companies submitted the requisite documents to prove the identity, creditworthiness of the lender companies, the genuineness of transactions, and the AO has not brought forward any evidences to dispute these documents submitted by the appellant. The AO has nowhere mentioned in his assessment order that requisite documents were not submitted by the appellant.

Order pronounced in the Court on 21st October, 2024 at Kolkata.