ACIT, CC - 3(4), KOLKATA V. RAMESWARA INFRASTRUCTURES LTD, KOLKATA

ITA 2692/KOL/2024

AI Insights

The case involves an appeal by the revenue against the order of the Commissioner of Income Tax (Appeal)-21, Kolkata, which had allowed the appeal of the assessee, Rameswara Infrastructures Ltd., on merits while dismissing the legal ground. The revenue challenged the deletion of an addition of Rs. 10,00,000 made under section 68 of the Income Tax Act, 1961, which was treated as a bogus unsecured loan. The assessee, on the other hand, filed cross-objections arguing that no addition was permissible in the absence of any incriminating material found during the search and seizure operation. The Tribunal, referencing a Supreme Court judgment, held that in the absence of incriminating material, no addition could be made in respect of a completed/unabated assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793250 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Appeal Filed On: 30-12-2024
• Other Referred Cases: PCIT vs. Abhisar Buildwell Pvt. Ltd. [2023] 149 taxmann.com 399 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; TDS; Search and seizure; Accommodation entries; Bogus
• Section: 142(1); 153A; 68; 139

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No.2692/Kol/2024 Assessment Year: 2019-20 ACIT, Central Circle-3(4), Kolkata.….……………….……….……….……Appellant vs. Rameswara Infrastructures Ltd ………………………….....……...…..…..Respondent 19A, Sarat Bose Road LR Sarani Kolkata-20. [PAN: AAECR0505J] C.O. 19/Kol/2025 (in ITA Nos.2692 /Kol/2024) Assessment Year: 2019-20 Rameswara Infrastructures Ltd.….……………. ….……….……….……Cross-Objector 19A, Sarat Bose Road LR Sarani Kolkata-20. [PAN: AAECR0505J] vs. ACIT, Central Circle-3(4), Kolkata...………………………...…..…………….Respondent Appearances by: Shri Manish Tiwari, FCA, appeared on behalf of the assessee. Shri Raja Sengupta, DR, appeared on behalf of the Revenue. Date of concluding the hearing : September 17, 2025 Date of pronouncing the order : September 22, 2025 ORDER Per Pradip Kumar Choubey, Judicial Member: The appeal has been preferred by the Revenue and cross-objection by the assessee against the order of the Commissioner of Income Tax (Appeal)-21, Kolkata [hereinafter referred to as the ‘CIT(A)’] all dated 14.08.2024 passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) for A.Y 2019-20. 2. At the outset, we notice that there is delay in filing of the appeal by the Revenue by 30 days and condonation petition for the said delay has Printed from counselvise.com ITA No.2692/Kol/2024 & C.O. 19/Kol/2025 Rameswara Infrastructures Ltd 2 been filed by the revenue. On perusal of the contents of the condonation petition, we find that the reasons mentioned therein are valid and reasonable. Hence, we condone the delay and admit the appeal of the revenue for adjudication. 3. Brief facts of the case are that the assessee is a company engaged in real estate business and it filed its return of income u/s. 139(1) of the Act for the relevant assessment year on 30.09.2015 declaring a loss of Rs 57,854/-. The return was subsequently processed u/s 143(1). Thereafter, a search and seizure operation was conducted at the premise of Khetawat Group. In view of such search, notice u/s 153C of the Act was issued to the assessee and in response to which the assessee submitted its return of income u/s. 153C on 27-01-2022 and declared a loss of Rs.57,854/- as filed in original return of income u/s 139 of the Act. Subsequently statutory notices u/s 143(2) and 142(1) were issued to the assessee and in compliance to such notices, the assessee made time to time compliances and submitted details and explanations as called for. The Assessing Officer has completed the assessment by making an addition of Rs.10,00,000/- u/s 68 on account of bogus unsecured loans received by the assessee. 4. Aggrieved by the said order, the assessee preferred an appeal before the ld. CIT(A) by taking two grounds i.e. one being legal that no addition was permissible in the absence of any incriminating material found in the course of search and the other is on merits. The ld. CIT(A) has dismissed the legal ground of the assessee but allowed the appeal of the assessee on merits. 5. Being aggrieved and dissatisfied, the revenue has preferred the appeal on merits and the assessee filed corresponding cross-objections on legal ground. Printed from counselvise.com ITA No.2692/Kol/2024 & C.O. 19/Kol/2025 Rameswara Infrastructures Ltd 3 6. First, we take C.O No.19/Kol/2025. The ld. AR has submitted that additions have been made by the Assessing Officer solely on the basis of statement of Shri Sunil Kumar Murmuria who is alleged to be an entry operator and engaged in the business of providing accommodation entries. The ld. AR submits that the additions made in the course of unabated assessment proceedings u/s 153A of the Act when there was no incriminating documents found in the course of search and seizure operation. The ld. AR had explained the seized materials in its paper- book and submits that there has been no connection of the seized materials with the assessee. He has placed reliance of the judgment of the Apex Court passed in PCIT vs. Abhisar Buildwell Pvt. Ltd. [2023] 149 taxmann.com 399 (SC) dated 24.04.2023. 7. The ld. DR supported the impugned order of the ld. CIT(A) by submitting that the assessee did not bring anything in the appellate proceedings which goes to prove that the Assessing Officer had not relied upon the incriminating material while making the impugned addition. According to him, the assessee did not explain regarding loan taken by the assessee company. 8. Upon hearing the submissions of the counsels of the respective parties, we have perused the facts of the case and find that the seized materials with its explanation which have been given by the assessee in its paper-book are as under: Printed from counselvise.com ITA No.2692/Kol/2024 & C.O. 19/Kol/2025 Rameswara Infrastructures Ltd 4 8.1 We have gone through the order passed by the Assessing Officer and find that the assessment was made on the sole basis of statement of Sri Sunil Kumar Murmuria and it is admitted fact that Sri Sunil Kumar Murmuria has retracted his previous statement which was recorded Printed from counselvise.com ITA No.2692/Kol/2024 & C.O. 19/Kol/2025 Rameswara Infrastructures Ltd 5 during the search. The assessee had already filed its original return of income for the Assessment Year 2019-20 on 09.10.2019 and time limit for issuance of notice u/s 143(2) of the Act for the Assessment Year 2019-20 was on 30.09.2020 and the date of search was 01.12.2020 hence the date of issuance of notice u/s 143(2) had expired on the date of search. Hence the date of search of the said assessment year falls under the category of unabated assessment. 9. Going over the order of the Assessing Officer and keeping in view the explanation on seized materials and considering the Apex Court’s judgment passed in PCIT vs. Abhisar Buildwell Pvt. Ltd. (supra), we do not find any hesitation to hold that in the present case, no incriminating materials found in the course of search that relates to the assessee company. The Hon’ble Supreme Court in the Abhisar Buildwell Pvt. Ltd.’s case (supra) has clearly held that in case, no incriminating material has unearthed during the search, the Assessing Officer cannot assess or reassess taking into consideration of other material in respect of completed/unabated assessment. Meaning thereby that in respect of completed/unabated assessment, no addition can be made by the Assessing Officer in the absence of any incriminating material found during the course of search. Keeping in view the said decision and going over the facts of the case, we find substance in the argument of the ld. counsel for the assessee. We hold that in the present case, no incriminating material was found during the course of search, hence the addition cannot be made and we, therefore, allow the cross-objection filed by the assessee. 10. ITA No.2692/Kol/2024 - Now, we come to the merits of the case as the department has preferred appeal by taking the ground that the ld. CIT(A) has erred in deleting the addition of bogus unsecured loan to the tune of Rs.10,00,000/- made u/s 68 of the Act when the genuineness of Printed from counselvise.com ITA No.2692/Kol/2024 & C.O. 19/Kol/2025 Rameswara Infrastructures Ltd 6 the transaction and identity and creditworthiness of the creditors could not be established. 10. We have gone through the order passed by the ld. CIT(A) and find that the ld. CIT(A) has passed an exhaustive order and thereafter allowed the appeal of the assessee. It is important to mention here that the assessee has furnished the complete details of loans to prove the identity, genuineness and creditworthiness of the said unsecured loans during the course of assessment which includes name, address, PAN, loan confirmations, MCA data, audited accounts, ITR copies, bank statements etc. and the Assessing Officer without pointing out any defect or discrepancy in the details furnished by the assessee made the addition merely on the basis of a retracted statement of Sunil Kumar Murmuria treating the amount as unexplained cash credit. It is important to mention that Murmuria Promoters (P) Ltd. had opening balance of Rs.70,17,792/- and the entire transactions were made through banking channels and copies of audited accounts reflecting the transaction. The ld. CIT(A) in its order has discussed this issue at length and it is relevant to reproduce the operative portion of the ld. CIT(A) which is as under: “Grounds 2, 3 & 5 In these grounds, the appellant has agitated against the action of the AO in making an addition of Rs. 10,00,000/- as unexplained cash credit u/s 68 of the Act by treating unsecured loans received from companies controlled by Sunil Kumar Murmuria as bogus as well as the action of the AO in stating that during the year when profit will be booked the assessee will not be entitled for the credit of the interest expenses to the tune of Rs.43,33,083/- and the assessee should not claim such interest in their Profit & Loss A/c during that AY. The Assessing Officer has recorded that an amount of Rs.10,00,000/- was received as loans from the companies controlled by Sunil Kumar Murmuria in his assessment order in Page No. 2. Opening Balance Loans Received Repai d Interest TDS Closing Printed from counselvise.com ITA No.2692/Kol/2024 & C.O. 19/Kol/2025 Rameswara Infrastructures Ltd 7 during the year Rs.6,83,03,595 /- Rs.10,00,000 /- - Rs.43,33,083 /- Rs.4,33,30 8 /- Rs.7,32,03,370 /- /- On perusal of the documents submitted by the appellant, it is observed that such loan amounting to Rs.10,00,000/- was received from M/s Murmuria Promoters Pvt. Ltd during the F.Y: 2018-19. Before proceeding further it is imperative to mention here that as per the notings of the AO in his assessment order as well as the statement recorded by Surendra Kumar Khetawat u/s 132(4) on 02.12.2020, an amount of Rs.22 crores was disclosed by Surendra Kumar Khetawat as undisclosed income of Khetawat Group. In the disclosure petition dated 27.01.2021 submitted before the DDIT, Investigation, the breakup of the said disclosure was provided in the manner mentioned below: Si. No. Name of the Entity Assessment Year Amount (Rs. In Lacs) Manner derived 1 Khetawat Properties Ltd 2020-21 1700 Cessation of Liability 2 Rameshwara Infrastructure Pvt Ltd 2021-22 500 Cessation of Liability Total 2200 Therefore it is evident that the appellant company has made a disclosure of Rs. 5 crores by writing off the liability of certain unsecured loans existing in the books of the appellant company during the AY: 2021- 22. The details of such unsecured loans which have been written off and disclosed as additional income by the appellant company in a lender wise manner is as follows: SL Name Loan Amount Written Off 1. Murmuria Infrastructure (P) Ltd 27,65,780 2. Murmuria Promoters (P) Ltd 72,80,617 Printed from counselvise.com ITA No.2692/Kol/2024 & C.O. 19/Kol/2025 Rameswara Infrastructures Ltd 8 3. Nandkunj Nirman (P) Ltd. 73,33,954 4. Prachur Commercial (P) Ltd. 1,31,98,958 5. Shree Durga Paints Ltd 29,21,945 6. Total (1) 3,35,01,254 7. Builcon Textiles (P) Ltd. 65,51,100 8. Goodward Tradelink PVT LTD 54,39,520 9. Stalk Tracom Pvt Ltd. 55,59,435 10. Suruchi Vanijya Pvt Ltd. 37,82,874 11. Veeline Holding Pvt Ltd 15,85,000 12. Verma Commercial Pvt Ltd 23,18,080 13. Payable Agnst. Land 2,39,890 Total (2) 2,54,75,899 TOTAL 5,89,77,153 The appellant during the course of assessment as well as appeal proceedings had filed various documents pertaining to these unsecured loans such as the loan confirmation statements for the period 01.01.2014 to 31.03.2020 along with PAN, audited accounts of the lender companies, copies of ITR filed by them in the respective years, and assessment orders passed in respect of some of these concerns pursuant to the search and seizure operation. From such details submitted by the appellant, it is observed that the loans taken by the appellant company from M/s Murmuria Promoters Pvt Ltd, are part of the disclosure of Rs. 5 crores made by the appellant company. On perusal of the ledgers of these companies, it is observed that these loans were ongoing loans wherein certain payments were also made during the period 01.04.2014 to 31.03.2020 and the closing balance of these loans were disclosed. Murmuria Promoters (P) Ltd AY Opening balance as on 1st April of relevant Loans taken during the year Loans repaid during the year Interest charged Closing balance (excluding TDS) as on Printed from counselvise.com ITA No.2692/Kol/2024 & C.O. 19/Kol/2025 Rameswara Infrastructures Ltd 9 FY 31st March of relevant FY 2015-16 55,05,792 4,20,000 58,83,792 2016-17 58,83,792 4,20,000 62,61,792 2017-18 62,61,792 4,20,000 66,39,792 2018-19 66,39,792 4,20,000 70,17,792 2019-20 70,17,792 10,00,000 4,08,083 83,85,067 2020-21 83,85,067 15,00,000 4,39,500 72,80,617 Since the closing balance of these loans as on 31.03.2020 have been written off by the appellant and the amounts have been included in the disclosure in the aftermath of search, the AO`s action therefore in adding the amount of loan received during the FY: 2018-19 in respect of M/s Murmuria Promoters Pvt Ltd is leading to double taxation as ultimately the outstanding balance in respect of these loans as on 31.03.2020 has been offered to tax by the appellant. It is also pertinent to mention that the same AO has assessed this lender pursuant to search, from AY: 2015-16 to AY: 2021-22, wherein no adverse inferences have been made and the investments made by such lender companies have not been placed under doubt. The additions made by the AO u/s 68 towards loans received from M/s Murmuria Promoters Pvt Ltd, to the tune of Rs. 10,00,000/- therefore cannot be sustained and stands deleted. In page 5 of the assessment order, the AO has commented that the assessee will not be entitled for the credit of this interest expenses to the tune of Rs. 43,33,083/- when profit will be booked. It has been observed that as on 01.04.2014 there was an opening balance to the tune of Rs.5,20,92,195/- from the lender companies allegedly being controlled by Sunil Murmuria and that there was substantial opening balance in respect of all such lender companies. It has already been held earlier that the action of the AO in making an addition u/s 68 towards fresh loans received during the year is unsustainable. The interest paid on such loans were included in income by the respective lender companies and the corresponding TDS credit was also claimed by the lenders in the ITR filed for AY: 2019-20 as well as earlier A.Ys. The appellant has submitted that Printed from counselvise.com ITA No.2692/Kol/2024 & C.O. 19/Kol/2025 Rameswara Infrastructures Ltd 10 it was explained to the AO that all these interest which were paid/payable were capitalised to the cost of land, which were held as stock in trade since long time past. The appellant has also submitted that all documents were filed to establish the genuineness of loans which were verified and not disputed by the AO in course of assessment proceedings. On perusal of the documents filed by the appellant it is observed that majority of the loans were pre-existent as on 01.04.2014 which have not been placed under doubt during the previous years and various repayments were also made prior to initiation of search. The accounting practice of the appellant also stands accepted. I find that these facts have been ignored by the AO and no specific findings have been given by him in his order. I therefore cannot concur with the AO and the action of the AO in this regard is not sustained. These grounds of appeal are therefore allowed.” 10.1 Keeping in view the above discussion of the ld. CIT(A) and considering the documents filed by the assessee, we do not find any infirmity in the impugned order of the ld. CIT(A) on merits also. On this score also, the revenue has failed to establish its case. Accordingly, the appeal by the revenue is hereby dismissed. 11. In the result, the appeal filed by the revenue is dismissed and cross-objection filed by the assessee is allowed. Kolkata, the 22nd September, 2025. Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated: 22 .09.2025. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- , 5. CIT(DR), Printed from counselvise.com ITA No.2692/Kol/2024 & C.O. 19/Kol/2025 Rameswara Infrastructures Ltd 11 //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "