DECPUTY COMMISSION OF INCOME TAX CENTRAL CIRCLE-3(1), KOLKATA, KOLKATA vs. CHIRAG JEWELLERS, KOLKATA
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Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI RAJPAL YADAV & DR. MANISH BORAD
आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER:
The captioned appeal filed by the Revenue, pertaining to assessment year 2014-15 is directed against the order passed by the Learned Commissioner of Income Tax (Appeals) – 21, Kolkata (hereinafter referred to as the ‘ld. CIT(A)’) dated 15th May, 2024 passed u/s 250 of the Income Tax Act, 1961 (‘Act’), which is arising out of the assessment order passed u/s 143(3) read with section 153A of the Income-tax Act, 1961 (the Act) vide order dated 30th December, 2017. 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
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:-
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The ld. CIT (A) after examining the documents as stated above, found force in the contention of the ld. Counsel for the assessee and was satisfied with the identity and creditworthiness of NCI Research and Financial Services and genuineness of the transaction of loan taken from all the alleged three cash creditors and deleted the impugned addition.
Aggrieved Revenue is now in appeal. The ld. DR vehemently argued supporting the order of the ld. AO. On the other hand, ld. Counsel for the assessee relied on heavily on the order of the ld. CIT (A) and the details furnished before the ld. CIT (A).
We have heard the rival contentions and perused the records available on records. The Revenue is aggrieved with the finding of the ld. CIT (A) deleting the addition made u/s 68 of the Act for the
“On perusal of the show-cause and its reply, the following key points emerge. 1. The AO in his show-cause has solely relied upon some statements of Shri Goutam Bose and Shri Aloke Kumar Das, Which were provided by the AO to the appellant;” SL Name of the peson Date of Appellant’s rebuttal to Remarks No. whose statement the such statement was recorded statement 1. Sri Alok Kumar Das 27.05.2015 The Deponent, Alok Kumar The statement does not consist of any before DDIT Das has confirmed that he question about the lender company Investigation is c a director of Ms M/s NCL Research & Jackson a Investment Ltd Financial Services Pvt. Ltd. In Q. 8 of Sri Abhishek and that Sri NK Fogla is the the said statement, the deponent has Mishra. MD of the Company. There accepted the fact that The was director is nothing adverse in the companies M/s GCM Securities mentioned in this Ltd, M/s Jackson Investments Ltd and statement. There is no M/s Silver Pearl Hospitality & Luxury mention of the fact that the Spaces Ltd. No where has it been loans given by this accepted by the deponent that he was a company is bogus loan. dummy director of M/s INCL Research & Financial Services Pvt. Ltd or that the loans provided to the appellant company were bogus. 2. Sri Alok Kumar Das 21.11.2017 Sri Alok Kumar Das, the The statement is primarily C related to Before AO Sri deponent before the AC M/s Khoobsurat Ltd and no questions Abhishek Devlal explained various aspects were Sasked about M/s Research & of the business of Msa NCL Financial Services Pvt. Ltd. the Khoobsurat Ltd. In lender company in the instant Cappeal. question no 30-36 he has In the statement, Shri Aloke Kumar confirmed that the loan was Das has nowhere stated that M/s given to Chirag Jewellers. Khoobsurat Ltd., was bogus and There is no mention of the furthermore he has deposed on oath in fact that the loans given by Q.36 about the source of M/s this company is bogus loan. Khoobsurat Ltd from which loans has There is nothing adverse been given to the appellant company stated against us or any during other Financial Years. company in this statement 3. Sri Goutam Bose 13.04.215 In this statement the This statement as it appears - has been before the DDIT & deponent Shri Goutam recorded primarily / in the context of Investigation 16.04.2015 Bose, has stated about the M/s Khoobsurat Ltd. In this sstatement several business the deponent has disclosed names and Sri Bal Krishna transactions and details of details e of various companies he is
“Evidently none of the documents tabulated above point to anything which would render the unsecured loans taken from the lender companies during the current year from NCL Research &Financial Services Ltd to the tune of Rs.2,00,00,000 and earlier years from M/s Khoobsurat Ltd to the tune of Rs.2,00,00,000, M/s Jackson Investment Ltd to the tune of Rs.2,50,00,000 & M/s Moonview Vincom (P) Ltd to the tune of Rs.75,00,000 as bogus.
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.
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Court on 21st October, 2024 at Kolkata.
Sd/- Sd/- (RAJPAL YADAV) (DR. MANISH BORAD) VICE PRESIDENT ACCOUNTANT MEMBER Kolkata, Dated 21.10.2024 *SS, Sr.Ps आदेश की प्रतततिति अग्रेतषत/Copy of the Order forwarded to : अिीिार्थी / The Appellant 1. प्रत्यर्थी / The Respondent 2. संबंतित आयकर आयुक्त / Concerned Pr. CIT 3. आयकर आयुक्त ) ( 4. अिीि / The CIT(A)- 5. तवभागीय प्रतततनति आयकर अिीिीय अतिकरण कोिकाता/DR,ITAT, Kolkata, , , गार्ड फाईि / Guard file. 6.
आदेशानुसार/ BY ORDER, TRUE COPY
Sr. PS/ Assistant Registrar आयकर अिीिीय अतिकरण ITAT, Kolkata
